Global stocks tumble after new Trump tariff threat

Joe McDonald, The Associated Press</span>
Published Tuesday, June 19, 2018 2:54AM EDT
Last Updated Tuesday, June 19, 2018 6:34AM EDT

BEIJING -- Global stock markets fell Tuesday after U.S. President Donald Trump escalated a dispute with Beijing over technology policy by threatening a tariff hike on an additional $200 billion of Chinese goods.

KEEPING SCORE: In early trading, Germany's DAX plunged 1.8 per cent to 12,606.14 and France's CAC 40 fell 1.4 per cent to 5,372.20. London's FTSE 100 lost 0.8 per cent to 7,565.81. On Monday, the DAX retreated 1.4 per cent and the CAC 40 shed 0.9 per cent while the FTSE 100 lost less than 0.1 per cent. Wall Street looked poised for losses, with the future for the Dow Jones industrial average off 1.6 per cent and that for the Standard & Poor's 500 index off 1.3 per cent.

ASIA'S DAY: The Shanghai Composite Index fell 3.8 per cent to 2,907.82 and Hong Kong's Hang Seng lost 2.8 per cent to 29,468.15. Tokyo's Nikkei 225 retreated 1.8 per cent to 22,278.48 and Seoul's Kospi gave up 1.5 per cent to 2,340.11. India's Sensex shed 0.6 per cent to 35,331.28 and Sydney's S&P-ASX 200 declined 0.6 per cent to 6,102.10. Benchmarks in Taiwan, New Zealand and Southeast Asia all declined.

TRADE TENSIONS: Trump directed the U.S. Trade Representative to prepare new tariffs on $200 billion in Chinese imports, stepping up a dispute companies and investors worry could drag down global trade and economic growth. Trump accused Beijing of being unwilling to resolve the dispute over complaints it steals or pressures foreign companies to hand over technology. China's Commerce Ministry criticized the White House action as blackmail and said Beijing was ready to retaliate.

ANALYST'S TAKE: "President Donald Trump's unwillingness to back down became apparent this morning, once again sinking markets into a risk-off atmosphere," Jingyi Pan of IG said in a report. Pan said market attention turned to China for "signs of further retaliation."

WALL STREET: U.S. stocks finished mixed in trading that ended before Trump issued his tariff threat. Household goods companies took some of the worst losses as the S&P 500 fell for the third time in four days. The S&P 500 fell 0.2 per cent, while the Dow lost 0.4 per cent. The Russell 2000 index of small-cap stocks rose 0.5 per cent. Many investors feel smaller and more U.S.-focused companies are less vulnerable in the event of a major trade dispute.

ENERGY: Benchmark U.S. crude lost 88 cents to $64.97 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 79 cents on Monday to $65.85. Brent crude, used to price international oils, fell 55 cents to $74.79 per barrel in London. The contract rose $1.90 the previous session to $75.34.

CURRENCY: The dollar declined to 109.75 yen from Monday's 110.54 yen. The euro edged down to $1.1552 from $1.1623.

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