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Trade war: Stocks slide as Trump says 'no deadline' for China deal - business live | Trade war: Stocks slide as Trump says 'no deadline' for China deal - business live |
(32 minutes later) | |
US president alarms investors by hinting that a China trade deal could wait until after the 2020 election | US president alarms investors by hinting that a China trade deal could wait until after the 2020 election |
The US stock market is also heading for sharper losses in an hour’s time: | |
Just in: Britain’s FTSE 100 index of top shares has hit its lowest level since late October. | |
The Footsie has now lost 108 points to 7,177, its weakest level in six weeks. | |
Donald Trump’s latest trade war escalation is causing alarm in the City, as traders fear that a deal with China could be a year away. The new tariffs being threatened on France have also raised worries that UK-EU relations could worsen. | |
Separately, the the rise in the pound is hurting multinationals - whose overseas earnings become less valuable in sterling terms. | |
Steelmaker Evraz is the top faller, down 6%, followed by NMC Health, the UAE-focused healthcare chain. | |
US-focused plumbing and building materials provider Ferguson has lost 3%, while global advertising firm WPP is down 2.5%. | |
Data firm Panjiva has calculated that America’s new proposed tariffs cover 4.1% of all French exports to the US, worth just over $2.4bn. | Data firm Panjiva has calculated that America’s new proposed tariffs cover 4.1% of all French exports to the US, worth just over $2.4bn. |
Cosmetics takes the biggest hit, followed by sparkling wine. | Cosmetics takes the biggest hit, followed by sparkling wine. |
It explains: | It explains: |
While shares slide, the pound is rising towards its highest level in six months. | While shares slide, the pound is rising towards its highest level in six months. |
Sterling has just hit $1.30 for the first time in six weeks, and is close to levels not seen since May. | Sterling has just hit $1.30 for the first time in six weeks, and is close to levels not seen since May. |
The pound often rises when opinion polls suggest Boris Johnson will win a majority next week. The latest poll shows the Conservative Party still holds a lead over Labour. | The pound often rises when opinion polls suggest Boris Johnson will win a majority next week. The latest poll shows the Conservative Party still holds a lead over Labour. |
The pound is also benefitting from the weaker dollar, which took a hit from disappointing US manufacturing data yesterday. | The pound is also benefitting from the weaker dollar, which took a hit from disappointing US manufacturing data yesterday. |
Agathe Demarais, Global Forecasting Director at The Economist Intelligence Unit, suspects that Donald Trump won’t actually impose those new tariffs on French champagne, cheese, handbags and cosmetics. | Agathe Demarais, Global Forecasting Director at The Economist Intelligence Unit, suspects that Donald Trump won’t actually impose those new tariffs on French champagne, cheese, handbags and cosmetics. |
Why? Because it would drive up prices in the shops - not a good idea in an election year. | Why? Because it would drive up prices in the shops - not a good idea in an election year. |
Demarais says: | Demarais says: |
But even so, the threat shows that US-European relations are weakening: | But even so, the threat shows that US-European relations are weakening: |
ITV’s Joel Hills points out that the UK could soon have its own digital services tax -- it’s in the Conservative manifesto! | ITV’s Joel Hills points out that the UK could soon have its own digital services tax -- it’s in the Conservative manifesto! |
Labour has also promised to tax US tech giants more, to better reflect the profits they make in the UK. | Labour has also promised to tax US tech giants more, to better reflect the profits they make in the UK. |
We flagged up earlier that the US is threatening to sanction Italy over its digital tax scheme, following last night’s move against France. Could the UK be next?... | We flagged up earlier that the US is threatening to sanction Italy over its digital tax scheme, following last night’s move against France. Could the UK be next?... |
This tweet shows the moment when Trump’s comments on China hit the wires, and rattled the Wall Street futures market: | This tweet shows the moment when Trump’s comments on China hit the wires, and rattled the Wall Street futures market: |
Investors are very disappointed by the prospect of waiting another year for a US-China trade deal, says Neil Wilson of Markets.com. | Investors are very disappointed by the prospect of waiting another year for a US-China trade deal, says Neil Wilson of Markets.com. |
The FTSE 250 index, which contains medium-size companies, has shed 0.8% today. | The FTSE 250 index, which contains medium-size companies, has shed 0.8% today. |
That’s a fall of 167 points today, to 20,531 - its lowest level in over a week. | That’s a fall of 167 points today, to 20,531 - its lowest level in over a week. |
Investors are now worrying that America might impose another swathe of tariffs on China in two weeks time. | Investors are now worrying that America might impose another swathe of tariffs on China in two weeks time. |
President Trump has previously threatened to impose 15% levies on $160 billion of Chinese imports on December 15, if a trade deal hadn’t been reached by then. | President Trump has previously threatened to impose 15% levies on $160 billion of Chinese imports on December 15, if a trade deal hadn’t been reached by then. |
Markets had been expecting America to hold fire, but Trump’s comments on China today may prompt a rethink. And that could spook markets badly. | Markets had been expecting America to hold fire, but Trump’s comments on China today may prompt a rethink. And that could spook markets badly. |
As Bloomberg reported: | As Bloomberg reported: |
The US stock market is now expected to open lower, following Donald Trump’s un-urgent comments about China. | The US stock market is now expected to open lower, following Donald Trump’s un-urgent comments about China. |
The Dow is tipped to drop by around 0.3%, according to the futures market. | The Dow is tipped to drop by around 0.3%, according to the futures market. |
Yesterday it shed almost 1%, after the president slapped Brazil and Argentina with tariffs on their steel and aluminium exports to America. | Yesterday it shed almost 1%, after the president slapped Brazil and Argentina with tariffs on their steel and aluminium exports to America. |
Donald Trump has alarmed investors by declaring that he’s really in no rush to reach a trade deal with China. | Donald Trump has alarmed investors by declaring that he’s really in no rush to reach a trade deal with China. |
In London, the FTSE 100 has slumped by 81 points or over 1% to 7,203 points, its lowest level in almost two weeks. | In London, the FTSE 100 has slumped by 81 points or over 1% to 7,203 points, its lowest level in almost two weeks. |
Mining stocks are leading the selloff, as a deeper trade war between Washington and Beijing is bad news for commodity prices. | Mining stocks are leading the selloff, as a deeper trade war between Washington and Beijing is bad news for commodity prices. |
Boom! Donald Trump has suggested that a trade deal with China could be a year away. | Boom! Donald Trump has suggested that a trade deal with China could be a year away. |
Asked if it could be agreed by the end of 2019, he replies that any deal is dependent on one thing - whether he wants to do it. | Asked if it could be agreed by the end of 2019, he replies that any deal is dependent on one thing - whether he wants to do it. |
The president claims that America is doing “very well” from the trade war, citing the $28bn financial aid handed to US farmers. He claims this came from the tariffs paid by China -- even though tariffs are actually paid by American companies when they import goods from China. | The president claims that America is doing “very well” from the trade war, citing the $28bn financial aid handed to US farmers. He claims this came from the tariffs paid by China -- even though tariffs are actually paid by American companies when they import goods from China. |
Trump then accuses China of “ripping off the US for many, many years”, and now being desperate to end the trade war. | Trump then accuses China of “ripping off the US for many, many years”, and now being desperate to end the trade war. |
He adds: | He adds: |
That may alarm investors, who had been hoping for a Phase One trade deal for a while. The next US election is in November 2020..... | That may alarm investors, who had been hoping for a Phase One trade deal for a while. The next US election is in November 2020..... |