SHANGHAI: China stocks closed slightly lower on Tuesday, while Hong Kong shares ended almost flat, as market participants digested US President-elect Donald Trump’s fresh tariff vows against China, which were largely anticipated.

China’s blue-chip CSI300 Index and the Shanghai Composite Index fell 0.2% and 0.1%, respectively. Hong Kong’s benchmark Hang Seng index was up by 0.04%.

Trump said he would impose a 25% tariff on all products from Mexico and Canada and an additional 10% tariff on goods from China.

Although Trump’s threats triggered falls in Asian markets such as Japan, market participants in China appeared unfazed and awaited more policy stimulus to lift the domestic economy.

Yang Tingwu, vice general manager of asset manager Tongheng Investment, said that an initial 10% tariff hike against China “is milder than we expected, so the news is positive”.

During his election campaign, Trump had said he would impose tariffs of 60% or more on goods from China.

Having experienced a trade war with the US in Trump’s first term, “China already has a playbook to deal with tariffs,” said Simon Yu, vice general manager at Panyao Asset Management.

Trump’s protectionist policies may prod China to “accelerate the process of self-reliance and import substitution.”

Gains in property and consumer staples shares were offset by losses in tech and materials stocks in the onshore market.

“Long-only funds and hedge funds have been selling Chinese equities for the past two weeks and the outflow may slow or even reverse now that there’s more clarity,” said Jason Chan, senior investment strategist at Bank of East Asia.