Shares of major Chinese technology companies witnessed a selloff on the expected brunt of tariffs and broader concerns that the trade war could hurt the world’s second-largest economy just when it was showing nascent signs of recovery.

Hang Seng Index closed down 13.22%. The Hang Seng Tech Index declined 17.16%.

Xiaomi, XPeng down more than 20%; Kuaishou down 19%; Alibaba, Li Auto down about 18%; SMIC, BYD Company down around 16%; JD.com, Meituan, NIO down around 15%; Tencent down 12%.

China on Friday said it would retaliate with 34% levies on all imports from the U.S. after President Trump imposed an additional 34% tariff on Chinese imports earlier last week.

OCBC head of Asia macro research Tommy Xie warned of the risk of an accelerated U.S.-China economic decoupling. “As the only major economy to announce formal retaliatory measures, China may risk angering Trump,” he said.

Rising trade tensions come as China’s latest manufacturing activity showed some signs of economic green shoots. Data released last week showed that the country’s official March manufacturing purchasing managers index expanded at the fastest pace in a year.

However, by prioritizing a forceful response to U.S. tariffs, China risks an increase in post-tariff prices that may somewhat strain its manufacturing and consumer sectors, Nomura analysts said.

Investors are bracing to see how much China’s export growth will decline after the Trump tariffs and how quickly China will expand fiscal spending to offset the negative impact. China’s expected fiscal stimulus boost could widen its fiscal deficits and weaken its public finances.

​Fitch Ratings last week cut China’s credit rating, citing expectations of ​”rapidly rising public debt” in the world’s second-biggest economy to weather the tariff headwinds. “In our view, sustained fiscal stimulus will be deployed to support growth, amid subdued domestic demand, rising tariffs and deflationary pressures,” the firm said.