Markets Fall as Trade War Fears Mount
Stock markets have fallen around the world in the wake of President Trump’s latest tariffs threat to China. The Dow Jones closed down almost 1.2% or 287 points after Asian and European markets fell sharply earlier.
Mr Trump has threatened to put tariffs on an extra $200bn (£141bn) of Chinese goods, sparking fears of a trade war. The US president said the tariffs would be imposed if China “refuses to change its practices”.
He condemned China’s “unfair practices related to the acquisition of American intellectual property and technology” and added: “Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong.”
The markets reacted badly with China’s Shanghai Composite faring the worst in Asia, ending the day down 3.8%.
In Europe, Germany’s Dax index was down 1.2% by the close and France’s Cac 40 had lost 1.1%. London’s FTSE 100 ended the day at 7,603.85, a fall of 27 points or 0.36%.
In the US, the losses on the Dow thrust the index into negative territory for the year, with firms with business in China, such as Boeing, driving the index’s sixth day of declines.
The S&P 500 and Nasdaq also fell, closing down 0.4% and 0.3% respectively.
“The fear from here is a continued back and forth, escalating trade penalties on both sides with a further negative impact on growth,” Stifel Chief Economist, Lindsey Piegza said.
Away from Mr Trump’s dispute with China, Russia said it would impose tariffs on certain American goods in response to the recent tariffs placed on steel and aluminium imports by the US.
Russia’s Economy Minister, Maxim Oreshkin, said the tariffs would target goods of which the Russians already had domestic equivalents.