The escalating trade war between Washington and Beijing has jolted investors for the first time in months as a sharp sell-off in Chinese shares on Tuesday started a ripple through global markets that hit companies in major exporting nations particularly hard. Investors have for weeks shrugged off the saber-rattling by US President Donald Trump, but analysts said the White House’s decision to pull the trigger on tariffs covering $50bn in Chinese imports last week, followed by new signals it would target an additional $200bn in goods if Beijing retaliated, was ratcheting upmarket anxiety.

“It became such a pervasive threat that market shrugged it off. But this could be the beginning of bigger and badder things,” said Kristina Hooper, global markets strategist at Invesco. “It’s hard to ignore this particular flare-up because there’s not a lot of positive news to overshadow it.” The White House gave no signal it was preparing to back down in the face of the sell-off. Peter Navarro, Mr. Trump’s trade adviser, said the administration believed it had the upper hand in the dispute, pointing to the $500bn in Chinese exports to the US as a rich target for tariffs compared to $130bn in American exports going the other way. “It’s clear that China does have much more to lose,” Mr. Navarro told reporters.