- US stocks are set to tumble, while Asian and European stocks slipped on Monday.
- Trump could expand duties to a further $US325 billion of Chinese products after a tariff hike on Friday.
- Chinese officials have pledged to take any “necessary countermeasures” and refused to swallow “bitter fruit” that hurts their interests.
- “Investors are again growing worried on what China’s response will be,” says one analyst.
US stocks are set to tumble when they open on Monday morning as traders prepared for the next twist in the US-China trade war.
Asian and European stocks slipped with US futures after the economic implications sank in. Chinese officials pledged to take any “necessary countermeasures” and refused to swallow “bitter fruit” that hurts their interests in the US-China trade war,according to Reuters.
“Investors are again growing worried on what China’s response will be,” said Konstantinos Anthis, head of research at ADSS. “A lengthy standoff will start taking a fresh toll on the domestic and global economies.”
US President Donald Trump accused China of walking back agreed provisions in a draft trade agreement last week, claiming the Asian nation “broke the deal.” Following unproductive talks in Washington last week, the Trump administration hiked tariffs from 10% to 25% on $US200 billion of Chinese goods on Friday. It’s reportedly preparing to expand tariffs to a further $US325 billion of Chinese products if a deal isn’t struck in the next three to four weeks, according to Bloomberg.
Several analysts predict US consumers will stomach the tariffs in the form of higher prices on clothes, electronics, toys, furniture, and other goods.
“The US sharply hiking tariffs on Chinese imports and China threatening to retaliate has thrown into doubt the possibility of the two sides reaching a deal,” said Jasper Lawler, head of research at London Capital Group.
The mounting uncertainty is taking a toll on equity markets.
Here’s the market roundup as of 9.39 a.m. (4.39 a.m.):
- US stocks are set to open lower, as futures underlying the Dow Jones Industrial Average, S&P 500 and Nasdaq are down between 1.2% and 1.6%.
- Asian equities closed lower. The Shanghai Composite slid 1.2% and Japan’s Nikkei fell 0.8%.
- European stocks dropped in early trading. Germany’s DAX was down 0.7%, the Euro Stoxx 50 slid 0.5%, and France’s CAC 40 slumped 0.6%. Britain’s FTSE 100 was flat.
- Bitcoin is down 4% at $US7,073 after rallying to an eight-month high over the weekend.
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