Blackstone Group LP (BX) saw its shares plummet 5.64% in Thursday's pre-market trading session, as the escalation of the US-China trade war sent shockwaves through the asset management sector. The sharp decline comes amid a broader selloff affecting major players in the industry, highlighting the vulnerability of asset managers to global economic tensions.

The primary catalyst for this downturn appears to be the latest developments in the ongoing trade dispute between the United States and China. Despite a temporary reprieve announced by President Trump, which involved lowering tariffs on dozens of countries, he simultaneously increased tariffs on China to 125% from 104%. This unexpected move has fueled uncertainty in the markets, potentially leading to an extended downturn that could directly impact asset managers' fees, which are often tied to the value of assets under management.

Other prominent asset managers also experienced significant drops in pre-market trading, with KKR down 3.8%, Apollo Global Management falling 2.8%, and Franklin Resources declining 2.3%. The widespread nature of these declines underscores the sector-wide impact of the trade war escalation. As tensions between the world's two largest economies continue to simmer, investors and analysts will be closely monitoring the potential long-term effects on asset managers and the broader financial markets.