Main Menu


Stock markets jittery as Trump’s tariff threat lingers

Donald TrumpLondon stocks went into reverse, with the FTSE 100 closing down 120 points (1.63%) at 7260.47 as stock markets remained jittery over US-China trade talks.

Only 12 companies in the blue chip index were in positive territory.

In the US the Dow Jones fell 2.2% following US President Donald Trump’s threat to impose higher tariffs on Chinese imports.

Investors panicked after Mr Trump tweeted on Sunday that he would raise tariffs on $200 billion worth of Chinese goods from 10% to 25%  by the end of the week, and would “soon” target the remaining Chinese imports with tariffs.

After falling sharply on fears that US-China trade talks would be derailed, markets staged a mini recovery. Japan Nikkei 225 index rose 0.5% in early trade, erasing Monday’s 2% slump, but closed down 1.5% as trading resumed after a 10-day break. Chinese shares rose after their worst drop in more than three years. The benchmark Shanghai Composite, which was 5% lower yesterday, advanced 0.6%, while Hong Kong’s Hang Seng was up 0.7%.

After easing back on Monday, US stock markets posted broad-based declines on Tuesday, led by tariff-sensitive industrial companies, as renewed worries over trade negotiations with China stoked global growth worries and kept investors away from risky assets.

Traders on Wall St (pic: NYSE)There was speculation that the Chinese would cancel a planned meeting in Washington this week, but this is now expected to go ahead.

Analysts believe there is a degree of posturing from Mr Trump. Laura Lambie, of Investec Wealth, said: “It could be a negotiating ploy. Will he follow through with it? Markets are hoping that despite all the furore a deal will be done.”

However, US Trade Representative Robert Lighthizer, said Mr Trump’s warning came after China backtracked on commitments it made during trade talks.

“Over the course of the last week or so we have seen … an erosion in commitments by China,” Lighthizer told reporters. “That in our view is unacceptable.”

“We’re not breaking off talks at this point. But for now … come Friday there will be tariffs in place,” Mr Lighthizer said.

Treasury Secretary Steven Mnuchin said: “The entire economic team … are completely unified and recommended to the president to move forward with tariffs if we are not able to conclude a deal by the end of the week.”

Chinese Foreign Ministry spokesman Geng Shuang said: “We still hope the United States can work hard with China to meet each other halfway, and strive to reach a mutually beneficial, win-win agreement on the basis of mutual respect.”




Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.