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US trade war: global shares plummet as China signals tariff retaliation – business live US trade war: global shares plummet as China signals tariff retaliation – business live
(35 minutes later)
Our delegation @EU_aluminium meeting Commissioner @MalmstromEU today on #Section232 Fruitful and constructive debate about the way forward. #Trade #aluminium pic.twitter.com/RxhaouJQIf
Cecilia Malmstrom, the EU’s trade commissioner, has outlined her view on the bloc’s temporary exemption from US tariffs in a series of tweets.
The exemption was agreed after Malmstrom travelled to Washington for talks with US trade representative Robert Lighthizer and commerce secretary Wilbur Ross.
...following discussions with @SecretaryRoss and @USTradeRep in Washington D.C. and Brussels. The EU is not the source of the global problems in the steel and aluminium sectors... 2/4
Preserving the global rules-based system for trade is what we should all be working towards. The EU will also keep our options open in terms of preserving our rights in the @WTO for further action. 4/4
Over in Brussels, where EU leaders are gathered for talks, positivity over the bloc’s 40-day exemption on tariffs, granted by Washington, appears to be wearing thin.Over in Brussels, where EU leaders are gathered for talks, positivity over the bloc’s 40-day exemption on tariffs, granted by Washington, appears to be wearing thin.
Belgium’s Prime Minister, Charles Michel, said he was not impressed at the suspension of tariffs until 1 May:Belgium’s Prime Minister, Charles Michel, said he was not impressed at the suspension of tariffs until 1 May:
I have the impression that the US leader wants to negotiate with the European Union by putting a gun to our head.I have the impression that the US leader wants to negotiate with the European Union by putting a gun to our head.
That’s a strange way to negotiate with an ally.That’s a strange way to negotiate with an ally.
Here is our latest market roundup as China reacts to US steel tariffs:Here is our latest market roundup as China reacts to US steel tariffs:
Peter Rosenstreich, a trader at Swissquote, the online bank, says markets are overreacting to “trade war hype”:Peter Rosenstreich, a trader at Swissquote, the online bank, says markets are overreacting to “trade war hype”:
Markets are overreacting to President Donald Trump’s threats of a trade war. Trump is using the issue for political gain, rather than actual trade repositioning.Markets are overreacting to President Donald Trump’s threats of a trade war. Trump is using the issue for political gain, rather than actual trade repositioning.
This will give him a nice bullet point for stump speeches in the 2020 campaign, but he gains little from sparking a full-blown trade conflict. Besides, the World Trade Organization is still in action.This will give him a nice bullet point for stump speeches in the 2020 campaign, but he gains little from sparking a full-blown trade conflict. Besides, the World Trade Organization is still in action.
Craig Erlam at online trading site Oanda, says investors are concerned that an impending trade war will derail the global economy:Craig Erlam at online trading site Oanda, says investors are concerned that an impending trade war will derail the global economy:
For a person who’s been obsessed with stock market gains since his election victory 16 months ago, US President Donald Trump doesn’t appear too concerned about the impact his tariffs are having at the moment.For a person who’s been obsessed with stock market gains since his election victory 16 months ago, US President Donald Trump doesn’t appear too concerned about the impact his tariffs are having at the moment.
Trump may be prepared to add the European Union to the list of those that are temporarily exempt from the tariffs – with Canada, Mexico and Australia having been allowed similar exemptions – but that has barely cushioned the blow for investors.Trump may be prepared to add the European Union to the list of those that are temporarily exempt from the tariffs – with Canada, Mexico and Australia having been allowed similar exemptions – but that has barely cushioned the blow for investors.
Understandably, the prospect of a trade war between the world’s two largest economies is not particularly desirable for investors. The global economy is finally starting the tick along nicely after a decade of efforts to repair the damage of the global financial crisis and the issues that followed and now we’re potentially having to deal with an entirely self-inflicted and avoidable problem.Understandably, the prospect of a trade war between the world’s two largest economies is not particularly desirable for investors. The global economy is finally starting the tick along nicely after a decade of efforts to repair the damage of the global financial crisis and the issues that followed and now we’re potentially having to deal with an entirely self-inflicted and avoidable problem.
Losses have widened across European market as investors digest the prospect of a US-China trade war.Losses have widened across European market as investors digest the prospect of a US-China trade war.
Here are the latest scores:Here are the latest scores:
FTSE 100: -1% at 6,884FTSE 100: -1% at 6,884
Germany’s DAX: -1.9% at 11,877Germany’s DAX: -1.9% at 11,877
France’s CAC: -1.9% at 5,068France’s CAC: -1.9% at 5,068
Italy’s FTSE MIB: -1.7% at 22,008Italy’s FTSE MIB: -1.7% at 22,008
Spain’s IBEX: -1.5% at 9,345Spain’s IBEX: -1.5% at 9,345
Europe’s STOXX 600: -1.5% at 364Europe’s STOXX 600: -1.5% at 364
Wall Street is also expected to open down:Wall Street is also expected to open down:
Dow Jones futures: -0.7%Dow Jones futures: -0.7%
S&P futures: -0.5%S&P futures: -0.5%
Nasdaq futures: -0.9%Nasdaq futures: -0.9%
Donald Tusk, President of the European Council, has called on the US to make permanent the EU’s temporary exemption from steel and aluminium tariffs.Donald Tusk, President of the European Council, has called on the US to make permanent the EU’s temporary exemption from steel and aluminium tariffs.
He says a good trading relationship between the US and EU is essential for “security and prosperity” in both regions:He says a good trading relationship between the US and EU is essential for “security and prosperity” in both regions:
EU calls for permanent exemption from US tariffs. #EUCO recalls commitment to strong transatlantic relations as a cornerstone of security, prosperity for US, EU and underlines support for dialogue on trade issues of common concern. #overcapacity https://t.co/5is7GKxyngEU calls for permanent exemption from US tariffs. #EUCO recalls commitment to strong transatlantic relations as a cornerstone of security, prosperity for US, EU and underlines support for dialogue on trade issues of common concern. #overcapacity https://t.co/5is7GKxyng
China’s planned retaliation against US tariffs on steel imports includes a potential 25% levy on pork imported from the US.China’s planned retaliation against US tariffs on steel imports includes a potential 25% levy on pork imported from the US.
As Bloomberg explains, this would hit the US agricultural sector, particularly in Iowa, a key battleground in the 2016 presidential election:As Bloomberg explains, this would hit the US agricultural sector, particularly in Iowa, a key battleground in the 2016 presidential election:
In its initial counterstrike, China announced a 25 percent levy on US pork imports - a heavy blow to Iowa, the top pork-producing state and a political battleground that swung to Trump in 2016 after going for Democrat Barack Obama in the previous two elections.In its initial counterstrike, China announced a 25 percent levy on US pork imports - a heavy blow to Iowa, the top pork-producing state and a political battleground that swung to Trump in 2016 after going for Democrat Barack Obama in the previous two elections.
Any hit to agricultural producers’ earnings would be especially painful as falling commodity prices already are hurting rural America. US farm income is forecast to drop 6.7% this year to its lowest level since 2006, according to US department of agriculture estimates that assumed normal trade relations with China.Any hit to agricultural producers’ earnings would be especially painful as falling commodity prices already are hurting rural America. US farm income is forecast to drop 6.7% this year to its lowest level since 2006, according to US department of agriculture estimates that assumed normal trade relations with China.
“Were farmers faced with falling prices for the exports and higher prices at home because of the import tariffs, the popularity of the tariffs would diminish quickly,” said Mike Jakeman, a global analyst at the Economist Intelligence Unit. “This is a high-risk strategy for the U.S. administration and one that is likely to weaken, rather than strengthen, the global economy.”“Were farmers faced with falling prices for the exports and higher prices at home because of the import tariffs, the popularity of the tariffs would diminish quickly,” said Mike Jakeman, a global analyst at the Economist Intelligence Unit. “This is a high-risk strategy for the U.S. administration and one that is likely to weaken, rather than strengthen, the global economy.”
Trump country might be hardest hit by China's tariff retaliation https://t.co/mrIcG9dYdl pic.twitter.com/pN3r9RTbG6Trump country might be hardest hit by China's tariff retaliation https://t.co/mrIcG9dYdl pic.twitter.com/pN3r9RTbG6
EU leaders meeting in Brussels have welcomed President Trump’s decision to row back on plans to impose tariffs on European steel.EU leaders meeting in Brussels have welcomed President Trump’s decision to row back on plans to impose tariffs on European steel.
Washington said on Thursday tariffs would be suspended for the EU - America’s biggest trading partner - Argentina, Australia, Brazil, Canada, Mexico and South Korea. The tariffs are suspended until 1 May as discussions continue.Washington said on Thursday tariffs would be suspended for the EU - America’s biggest trading partner - Argentina, Australia, Brazil, Canada, Mexico and South Korea. The tariffs are suspended until 1 May as discussions continue.
A spokesman for the French government said this morning:A spokesman for the French government said this morning:
Europe has clearly stated its intention to riposte and enter a trade war ... it’s a good thing that President Trump changed his mind on tariff increases.Europe has clearly stated its intention to riposte and enter a trade war ... it’s a good thing that President Trump changed his mind on tariff increases.
Germany’s economy minister, Peter Altmaier, said:Germany’s economy minister, Peter Altmaier, said:
I am very pleased that we have avoided a situation for the German steel and aluminium industry and its workers, that could have led to great uncertainty.I am very pleased that we have avoided a situation for the German steel and aluminium industry and its workers, that could have led to great uncertainty.
We don’t want further unilateral measures, rather we want sensible agreements.We don’t want further unilateral measures, rather we want sensible agreements.
European commissioner Pierre Moscovici kept it simple:European commissioner Pierre Moscovici kept it simple:
This is progress, let’s keep talking.This is progress, let’s keep talking.
Theresa May has also welcomed the decision.Theresa May has also welcomed the decision.
Next is one of Britain’s biggest retailers and the latest results for the year ending January 2018 reflect a tough trading backdrop on the UK’s high streets.Next is one of Britain’s biggest retailers and the latest results for the year ending January 2018 reflect a tough trading backdrop on the UK’s high streets.
Pre-tax profits fell 8% to £726m, reflecting a 7.9% fall in sales in its shops. The drop was not enough to offset a 9% rise in online sales.Pre-tax profits fell 8% to £726m, reflecting a 7.9% fall in sales in its shops. The drop was not enough to offset a 9% rise in online sales.
Lord Wolfson, chief executive, said it had been an “uncomfortable year”, adding:Lord Wolfson, chief executive, said it had been an “uncomfortable year”, adding:
In many ways 2017 was the most challenging year we have faced for 25 years. A difficult clothing market coincided with self-inflicted product ranging errors and omissions.In many ways 2017 was the most challenging year we have faced for 25 years. A difficult clothing market coincided with self-inflicted product ranging errors and omissions.
At the same time, the business has had to manage the costs, systems requirements and opportunities of an accelerating structural shift in spending from retail stores to online.At the same time, the business has had to manage the costs, systems requirements and opportunities of an accelerating structural shift in spending from retail stores to online.
In the end our profits were in line with the forecast we issued in January 2017 and the company goes into the coming year in good financial health.In the end our profits were in line with the forecast we issued in January 2017 and the company goes into the coming year in good financial health.
However, investors are not perturbed by the fall in profits, given they were in line with expectations.However, investors are not perturbed by the fall in profits, given they were in line with expectations.
In the absence of any nasty shocks, Next is now the biggest riser on the FTSE 100, up 3.3% at £47.83.In the absence of any nasty shocks, Next is now the biggest riser on the FTSE 100, up 3.3% at £47.83.
The FTSE 100 has fallen less than expected in early trading, currently down 33 points or 0.5% at 6,919.The FTSE 100 has fallen less than expected in early trading, currently down 33 points or 0.5% at 6,919.
The losses have been limited by GlaxoSmithKline and Next, which are the top two risers this morning:The losses have been limited by GlaxoSmithKline and Next, which are the top two risers this morning:
Shares in the pharma giant GSK are being boosted by the decision to withdraw its interest in buying Pfizer’s consumer healthcare business. Shares in the pharma giant GSK are being boosted by the decision to withdraw its interest in buying Pfizer’s consumer healthcare business. GSK had been the favourite to buy the business in a multibillion-pound deal after Reckitt Benckiser pulled out.
The rise in Next’s shares follow the publication of its annual results, which show an 8% fall in pre-tax profits. More on that soon.The rise in Next’s shares follow the publication of its annual results, which show an 8% fall in pre-tax profits. More on that soon.
And we’re off... Europe’s main markets have opened down, as predicted:And we’re off... Europe’s main markets have opened down, as predicted:
FTSE 100: -0.5%FTSE 100: -0.5%
Germany’s DAX: -0.9%Germany’s DAX: -0.9%
France’s CAC: -0.9%France’s CAC: -0.9%
Italy’s FTSE MIB: -1.2%Italy’s FTSE MIB: -1.2%
Spain’s IBEX: -0.9%Spain’s IBEX: -0.9%
Tougher rules should be imposed on night flights and keeping costs down for passengers before parliament approves a third runway at Heathrow.Tougher rules should be imposed on night flights and keeping costs down for passengers before parliament approves a third runway at Heathrow.
That is the verdict of the transport select committee in a report published overnight.That is the verdict of the transport select committee in a report published overnight.
Concerns are centred on the environmental impact of Heathrow expansion, as Lilian Greenwood, the committee’s chair, explains:Concerns are centred on the environmental impact of Heathrow expansion, as Lilian Greenwood, the committee’s chair, explains:
At present, the draft national policy statement does not guarantee that passengers will be protected from the cost risks associated with the scheme. The secretary of state must set out how airport charges will be held down.At present, the draft national policy statement does not guarantee that passengers will be protected from the cost risks associated with the scheme. The secretary of state must set out how airport charges will be held down.
She added:She added:
Thousands of people across London could be exposed to worse levels of noise, air quality and traffic congestion – there must be sufficient measures to protect or compensate them.Thousands of people across London could be exposed to worse levels of noise, air quality and traffic congestion – there must be sufficient measures to protect or compensate them.
Read our full story on the report:Read our full story on the report:
European markets are expected to follow Asia lower when they open in about 20 minutes.European markets are expected to follow Asia lower when they open in about 20 minutes.
Here are the opening calls from traders at the spread-betting firm IG:Here are the opening calls from traders at the spread-betting firm IG:
European Indices:#FTSE 6900 -0.76%#DAX 11945 -1.28%#CAC 5098 -1.34%#MIB 22151 -1.10%#IBEX 9380 -1.13%European Indices:#FTSE 6900 -0.76%#DAX 11945 -1.28%#CAC 5098 -1.34%#MIB 22151 -1.10%#IBEX 9380 -1.13%
Jasper Lawler at London Capital Group says the stand-off between the US and China is sending a chill through the markets:Jasper Lawler at London Capital Group says the stand-off between the US and China is sending a chill through the markets:
Despite Trump claiming that the tariffs would make the US “a much stronger nation” the markets are keenly aware that there will be no winners in a trade war.Despite Trump claiming that the tariffs would make the US “a much stronger nation” the markets are keenly aware that there will be no winners in a trade war.
Worse still, the tit for tat responses that we are now seeing - and can expect to see more of - between the world’s two largest economies, is damaging for their economies and the broader global economy.Worse still, the tit for tat responses that we are now seeing - and can expect to see more of - between the world’s two largest economies, is damaging for their economies and the broader global economy.
Good morning if you’re just joining us – and hello again if you’ve already been reading.Good morning if you’re just joining us – and hello again if you’ve already been reading.
It’s been a very busy day so far on the stock and currency markets so here’s a roundup of what’s happened:It’s been a very busy day so far on the stock and currency markets so here’s a roundup of what’s happened:
Fears of a global trade war have intensified after China signalled it would retaliate against US tariffs.Fears of a global trade war have intensified after China signalled it would retaliate against US tariffs.
Beijing said it didn’t want a trade war and urged the US to pull back from the brink. But it said it wasn’t afraid of one and has drawn up a list of more than 100 US products that it will hit with duties if Donald Trump goes ahead with his tariffs on Chinese steel and aluminium.Beijing said it didn’t want a trade war and urged the US to pull back from the brink. But it said it wasn’t afraid of one and has drawn up a list of more than 100 US products that it will hit with duties if Donald Trump goes ahead with his tariffs on Chinese steel and aluminium.
Stock markets in Asia have fallen sharply. The Nikkei in Japan closed down 4.51% and in Hong Kong and Shanghai, where trading is still going on, the markets are down 3.18% and 3.4%.Stock markets in Asia have fallen sharply. The Nikkei in Japan closed down 4.51% and in Hong Kong and Shanghai, where trading is still going on, the markets are down 3.18% and 3.4%.
European markets are set to open down as well with FTSE 100 on course to drop 0.74%European markets are set to open down as well with FTSE 100 on course to drop 0.74%
Key industrial commodities have been hit as well, with the iron ore futures price down 5% and copper at a three-month lowKey industrial commodities have been hit as well, with the iron ore futures price down 5% and copper at a three-month low
The yen is up as the US dollar continued to slump. The pound rose against the greenback to $1.415.The yen is up as the US dollar continued to slump. The pound rose against the greenback to $1.415.
For a roundup here’s our news story:For a roundup here’s our news story: