US president Donald Trump sent global markets into tailspin on Tuesday after hinting that a US-China trade deal could be delayed for months.
Trump said he could “wait until after the election for the China deal” during a press conference in London as part of a NATO summit visit. Markets had assumed that a deal to resolve the ongoing trade conflict between the two sides could be close.
“This insouciance about the prospect of putting off any deal has completely upended market expectations that we were potentially millimetres away from a deal and also flies in the face of the optimism that has seen markets rally strongly over the last few weeks,” said Michael Hewson, chief market analyst at CMC Markets.
“Donald Trump continued to play havoc with the markets on Tuesday,” said Connor Campbell, a financial analyst at trading platform SpreadEx.
“Investors immediately started to fret that this could mean any agreement is delayed for another 12 months – a massive can-kick given the two superpowers were meant to sign a deal at the cancelled APEC summit in mid-November.”
European stocks had already been under pressure earlier in the trading session after the US proposed $2.4bn-worth of tariffs on French goods including champagne, hand bags, and cheese overnight.
French luxury group Kering (KER.PA), which owns brands like Gucci and Yves Saint Laurent, declined by 1.8% and LVMH (MC.PA), which owns Moet champagne, shed 1.4%. French airplane manufacturer Airbus (AIR.PA), which is at the centre of a long-running dispute between the US and EU over subsidies, was one of the worst performers in Europe. Shares closed down 4.4% in Paris.