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(CNN Business) —  

Global stock markets slumped Monday, as investors reacted to the prospect of a drawn-out trade war.

China on Sunday said it will “not back down” in a trade fight with the United States, two days after signaling it could blacklist foreign companies from its huge market.

“The series of actions over the weekend means that China’s ‘long march’ has begun,” Iris Pang, an economist with ING said in a research note Monday.

“It means that the trade war has not only become a technology war but also a broad-based business war. There will be more retaliation actions from China, especially for the technology sector,” she added.

Tokyo’s Nikkei recovered slightly from a rough opening to close down 0.9% on Monday. The Shanghai Composite declined 0.3%, while Hong Kong’s Hang Seng shed 0.1%.

In Europe, benchmark indexes in London and Paris were down 1% in early trading. Frankfurt’s DAX declined 0.6%.

The Chinese government released a document on Sunday that blamed the United States for the breakdown in trade talks.

Wang Shouwen, a vice minister of commerce and deputy trade negotiator, said the United States can’t force a trade deal on China and that the country “will not back down.”

Beijing also said on Sunday that it is investigating FedEx after embattled Chinese tech firm Huawei said the delivery company diverted to the United States two packages intended for the company’s offices in China.

The move on FedEx (FDX) comes after China announced Friday that is building an “unreliable entity list,” effectively preparing to blacklist foreign companies as trade tensions with the United States continue to escalate.

South Korea’s KOSPI bucked the trend on Monday, rising more than 1% as foreign investors snapped up shares in tech company Samsung Electronics (SSNLF) and chip maker SK Hynix.

Samsung and SK Hynix could benefit from increased sales to Chinese firms barred from doing business with US companies, according to a recent research note from Rex Wu, an analyst with brokerage Jefferies.

President Donald Trump announced Friday that he will remove India from a special trade program on Wednesday. Meanwhile, investors are still trying to determine how new tariffs on Mexico might affect American businesses and the economy.

“Recent events have shown that markets cannot really ever dismiss (trade) uncertainties and that investors may need to accept that the United States is comfortable fighting a trade war on many fronts,” said Hannah Anderson, a market strategist with JP Morgan.

Dow futures were down 160 points, or 0.6%, signaling a rough start to June for Wall Street. S&P 500 futures dropped 0.6% and Nasdaq futures fell about 0.8%.

David Goldman contributed to this story.