Yahoo Finance European shares are sliding over Trump's latest tweets on China
Donald Trump has sent European shares tumbling downwards with a string of surprise tweets about China, ratcheting up tensions with new tariffs on Chinese goods.
Investors took fright at a worsening of the dispute between the world’s biggest economies, with the US president vowing to hike tariffs this week on $200bn of Chinese products.
The EURO Stoxx 50 (^STOXX50E), the eurozone’s leading blue-chip index, fell by more than 2.2% in early trading before recovering slightly on Monday. It could be in line for its day since December.
The wider Stoxx 600 (^STOXX) was down 1.5% at midday GMT, in its steepest fall in weeks.
Cars, chemicals, banks and tech industries were all hit by the sell-off, with the volatility gauge for eurozone stocks hit its highest level since late March.
UK stock markets are closed today because of the public holiday on Monday.
Shares were down between 1.6% and 2.2% in early trading in Germany, France, Italy and Spain, according to Reuters.
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Core euro zone bonds yields fell, with Germany’s 10-year government bond yield negative at -0.002%.
The president of DIHK, Germany’s chambers of commerce, told regional paper Augsburger Allgemeine the tariff threats were “not good at all” for Germany’s economy.
The sell-off may reflect fears Trump could also increase the pressure on the European Union in trade talks.
"It would seem reasonable to think the US-EU trade negotiations are going to come from a no less aggressive stance from the White House," one London-based trader told Reuters.
The US president’s actions took investors by surprise as he tweeted his intentions on Sunday, as hopes had been growing of progress in trade talks between the USA and China.
Trump claimed tariffs paid by China were “partially responsible for our great economic results.”
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars....
— Donald J. Trump (@realDonaldTrump) May 5, 2019
....of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!
— Donald J. Trump (@realDonaldTrump) May 5, 2019
The US president followed up with a tweet this morning taking aim at China once again:
The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!
— Donald J. Trump (@realDonaldTrump) May 6, 2019
