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You can find the current article at its original source at https://www.theguardian.com/business/live/2019/jun/03/trade-war-market-sell-off-china-us-manufacturing-eurozone-uk-brexit-business-live
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| Trade wars: Markets slide again as China blasts US's 'intimidation and coercion' - business live | Trade wars: Markets slide again as China blasts US's 'intimidation and coercion' - business live |
| (32 minutes later) | |
| The sell-off is deepening in London. | |
| The FTSE 100 is now down 80 points, or over 1%, with only a handful of stocks defying gravity. Every sector has fallen, led by energy (tracking the oil price), technology (China concerns), consumer goods-makers and miners (recession fears). | |
| Online grocer Ocado is the top faller, after being downgraded by investment bank Jefferies. | |
| Morgan Stanley has also warned investors that the US-China trade war could be worse than feared. | |
| Its chief economist, Chetan Ahya, has warned that the global economy could slump into recession if president Trump expands the trade war to all Chinese exports. | |
| Ahya wrote: | |
| “My recent conversations with investors have reinforced the sense that markets are underestimating the impact of trade tensions. | |
| Investors are generally of the view that the trade dispute could drag on for longer, but they appear to be overlooking its potential impact on the global macro outlook.” | |
| Morgan Stanley sees a recession within a year if US-China Trade war gets worse. @EconomicTimes @business pic.twitter.com/dhEsdl5Ldl | |
| Wall Street giant Goldman Sachs has become more pessimistic about the trade war. | |
| It now believes there’s a 60% chance that America imposes tariffs on ALL Chinese goods (currently around half, or $300bn per year, are exempt from the trade war). That’s up from 40% previously. | |
| In a report issued last night, Goldman economists warn: | |
| “Rhetoric in China has intensified... additional escalation looks likely from both sides, including tariff and non-tariff measures.” | |
| European stock markets have fallen in early trading, hit by trade war anxiety. | |
| Britain’s FTSE 100 has shed 66 points, or 0.9%, to 7095, its lowest point since mid-March. China’s latest criticism of America’s trade war policy (see here) is hitting sentiment in the City. | |
| The French CAC and Germany’s DAX have both lost 0.75%, adding to Friday’s losses (after America announced new tariffs on Mexican goods). | |
| Trump 'deadly serious' about Mexico tariff threat, White House aide says | |
| Neil Wilson of Markets.com says a combative speech by Chinese defence minister Wei Fenghe is also hitting share prices. | |
| Global stocks were down by around 6% in May – can we get a better June? The runes are not looking great. | |
| European shares are lower today as trade tensions continue to mount and investors exhibit greater fear about the global economy and the risk of recession. Asian markets were generally lower after a big selloff on Wall Street on Friday that saw the S&P 500 decline 37 points, or 1.32%, to finish at 2,752.06, below its 200-day moving average. | |
| The trade war is not cooling down; in fact, it looks like the rhetoric is heating up and further escalation seems likely. China is raising tariffs on $60bn of US goods in retaliation for tariffs, coming up with its own blacklist of foreign companies, has accused the US of resorting to ‘intimidation and coercion’, and begun an investigation into FedEx. And the Chinese defence minister says if the US wants a fight, they will ‘fight to the end’. No end in sight, and the chances of a G20 détente are slim. | |
| Investors are also reeling from the news that America considered beginning a trade war with Australia - a key US ally. | Investors are also reeling from the news that America considered beginning a trade war with Australia - a key US ally. |
| The New York Times reported that some of Mr Trump’s top trade advisers had urged the tariffs as a response to a surge of Australian aluminium flowing onto the US market during the past year. | The New York Times reported that some of Mr Trump’s top trade advisers had urged the tariffs as a response to a surge of Australian aluminium flowing onto the US market during the past year. |
| Australian PM Scott Morrison has tried to calm nerves, saying his administration is “working closely with the US officials and the White House” on trade issues. That’s not a denial, though, that something has been threatened..... | Australian PM Scott Morrison has tried to calm nerves, saying his administration is “working closely with the US officials and the White House” on trade issues. That’s not a denial, though, that something has been threatened..... |
| Scott Morrison plays down report US planning tariffs on Australian aluminium | Scott Morrison plays down report US planning tariffs on Australian aluminium |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| It’s a new month, but the same old issues. The markets are starting June as they ended May - with anxiety over US trade policy hitting asset prices and driving up volatility. | It’s a new month, but the same old issues. The markets are starting June as they ended May - with anxiety over US trade policy hitting asset prices and driving up volatility. |
| Over the weekend, Beijing stepped up its fightback against Donald Trump by accusing Washington of”intimidation and coercion”. | Over the weekend, Beijing stepped up its fightback against Donald Trump by accusing Washington of”intimidation and coercion”. |
| Vice Commerce Secretary Wang Shouwen blasted America’s decision to blacklist Chinese firms such as Huawei, saying: | Vice Commerce Secretary Wang Shouwen blasted America’s decision to blacklist Chinese firms such as Huawei, saying: |
| “The China-US economic and trade consultations have been severely frustrated by the US tariff increases and [the US’s] abuse of export controls by including Chinese companies on the entities list.” | “The China-US economic and trade consultations have been severely frustrated by the US tariff increases and [the US’s] abuse of export controls by including Chinese companies on the entities list.” |
| In a new white paper on trade, China blames the US government for the failure to reach a trade deal, claiming: | In a new white paper on trade, China blames the US government for the failure to reach a trade deal, claiming: |
| Resorting to intimidation and coercion, it persisted with exorbitant demands . . . and insisted on including mandatory requirements [that infringe on] China’s sovereign affairs in the deal.” | Resorting to intimidation and coercion, it persisted with exorbitant demands . . . and insisted on including mandatory requirements [that infringe on] China’s sovereign affairs in the deal.” |
| The white paper also lays out how the trade war between the two economic powers has backfired. Bloomberg has more details: | The white paper also lays out how the trade war between the two economic powers has backfired. Bloomberg has more details: |
| The paper contends that the trade actions have done serious harm to the U.S. economy by increasing production costs, causing prices hikes, damaging growth and people’s livelihoods and creating barriers to U.S. exports to China. In short, Trump’s tariffs aren’t helping, China concluded. | The paper contends that the trade actions have done serious harm to the U.S. economy by increasing production costs, causing prices hikes, damaging growth and people’s livelihoods and creating barriers to U.S. exports to China. In short, Trump’s tariffs aren’t helping, China concluded. |
| “It is foreseeable that the latest U.S. tariff hikes on China, far from resolving issues, will only make things worse for all sides,” according to the white paper. | “It is foreseeable that the latest U.S. tariff hikes on China, far from resolving issues, will only make things worse for all sides,” according to the white paper. |
| And rather than backing down, China has just fulfilled its pledge to increase tariffs on $60bn of American good, in response to the latest US tariffs on Chinese goods. | And rather than backing down, China has just fulfilled its pledge to increase tariffs on $60bn of American good, in response to the latest US tariffs on Chinese goods. |
| Asian markets have reacted badly - Japan’s Nikkei has shed almost 1% today, with China’s Shanghai composite also dipping. European and US markets are also expected to open in the red, ahead of new healthchecks on their factory sectors today. | Asian markets have reacted badly - Japan’s Nikkei has shed almost 1% today, with China’s Shanghai composite also dipping. European and US markets are also expected to open in the red, ahead of new healthchecks on their factory sectors today. |
| European Opening Calls:#FTSE 7131 -0.43%#DAX 11646 -0.69%#CAC 5168 -0.76%#MIB 19625 -0.89%#IBEX 8946 -0.65% | European Opening Calls:#FTSE 7131 -0.43%#DAX 11646 -0.69%#CAC 5168 -0.76%#MIB 19625 -0.89%#IBEX 8946 -0.65% |
| The oil price - a gauge of growth expectations - has taken a tumble too; Brent crude is now just $61.30 per barrel, the lowest since mid-February. | The oil price - a gauge of growth expectations - has taken a tumble too; Brent crude is now just $61.30 per barrel, the lowest since mid-February. |
| Global mkts have started the week on negative footing & oil extends slide as trade wars stoke global recession anxiety. Crude oil tumbled 16% in May. Shanghai copper at 2y low. Treasuries flat w/US 10y yield at 2.13%. Mkts price in 50% chance of Fed cut by Jul. Bitcoin at $8.6k. pic.twitter.com/C9ARFJriTS | Global mkts have started the week on negative footing & oil extends slide as trade wars stoke global recession anxiety. Crude oil tumbled 16% in May. Shanghai copper at 2y low. Treasuries flat w/US 10y yield at 2.13%. Mkts price in 50% chance of Fed cut by Jul. Bitcoin at $8.6k. pic.twitter.com/C9ARFJriTS |
| Donald Trump’s threat to impose tariffs on Mexico late last week has hit investor confidence too. | Donald Trump’s threat to impose tariffs on Mexico late last week has hit investor confidence too. |
| Jim Reid of Deutsche Bank told clients this morning that it has increased the risk that America intensifies its trade dispute with Europe. | Jim Reid of Deutsche Bank told clients this morning that it has increased the risk that America intensifies its trade dispute with Europe. |
| One of the additional worries would be that if the US has been so quick to escalate the trade war on these two countries [Mexico and China] the bar must be a bit lower to carry out a trade assault on Europe at some point in the future. Interesting times. | One of the additional worries would be that if the US has been so quick to escalate the trade war on these two countries [Mexico and China] the bar must be a bit lower to carry out a trade assault on Europe at some point in the future. Interesting times. |
| The latest PMI reports, due today, will show whether manufacturers took a big hit from the trade war last month. | The latest PMI reports, due today, will show whether manufacturers took a big hit from the trade war last month. |
| The agenda | The agenda |
| 9am BST: Eurozone factory PMI report for May | 9am BST: Eurozone factory PMI report for May |
| 9.30am BST: UK factory PMI report for May | 9.30am BST: UK factory PMI report for May |
| 3pm BST: US factory PMI for May | 3pm BST: US factory PMI for May |