US-China trade war: global markets tumble
Global equities have tumbled amid an escalation in the United States-China trade war that saw more than $US1 trillion wiped off stock values overnight.
China announced it will impose tariffs of 5%-25% on $US60 billion worth of US goods, including frozen vegetables and liquefied natural gas.
“China’s adjustment on additional tariffs is a response to US unilateralism and protectionism,” the Chinese Ministry of Finance said.
“China hopes the US will get back to the right track of bilateral trade and economic consultations and meet with China halfway.”
China’s new tariffs follow a warning from US President Donald Trump to Beijing not to retaliate to his administration’s new tariffs on $US200 billion of Chinese goods.
Mr Trump said at the White House that he will meet with Chinese President Xi Jinping on the sidelines of the upcoming G20 to discuss the trade war.
“Maybe something will happen,” Mr Trump said.
“We’re going to be meeting, as you know, at the G20 in Japan and that’ll be, I think, probably a very fruitful meeting.”
However, President Trump has also ordered US trade chief Robert Lighthizer to begin the process of imposing tariffs on all remaining imports from China.
The US Trade Representative’s office has confirmed a public hearing is planned for next month to discuss the possibility of raising duties of up to 25% on a further $US300 billion worth of imports from China.
In response to Beijing’s announcment, the Dow Jones Industrial Average fell by 617 points, down 2.4% to 25,325.
The benchmark S&P 500 closed 2.4% lower at 2,812, while the tech-heavy Nasdaq index was the hardest hit — dropping 3.4% to 7,647.
Among the most vulnerable stocks are Boeing and Caterpillar, which slid by 4.9% and 4.6% respectively.
Market snapshot at 7:50am (AEST):
- ASX SPI futures -0.9pc at 6,243, ASX 200 (Monday’s close) -0.2pc at 6,298
- AUD: 69.43 US cents, 53.56 British pence, 61.85 Euro cents, 75.85 Japanese Yen, $NZ1.06
- US: Dow Jones -2.4pc at 25,325, S&P 500 -2.4pc at 2,812, Nasdaq -3.4pc at 7,647
- Europe: FTSE 100 -0.6pc at 7,164, DAX -1.5pc 11,877, CAC -1.2pc at 5,263, Euro Stoxx 50 -1.2pc at 3,321
- Commodities: Brent crude -1pc at $US69.92/barrel, spot gold +1.1pc at $US1,299.66/ounce
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