Global Stocks Drop After Trump Signals Further Delays to China Deal
By Anna Isaac
Global stocks fell Tuesday after President Trump signaled that he might be willing to wait to strike a trade deal with China until after the U.S. elections next year.
Futures linked to the Dow Jones Industrial Average declined 0.4%, reversing gains posted earlier in the day. The pan-continental Stoxx Europe 600 gauge fell almost 0.2%.
Mr. Trump said he has "no deadline" for reaching a trade accord with China, prompting concerns that a long-awaited end to the trade war between the world's two biggest economies may be further delayed.
The dispute between the two countries, which has curtailed global trade as both sides imposed tariffs and threatened new levies, has weighed on the outlook for economic growth around the world. An agreement with China is dependent on whether he wants to make one, the president said in London on Tuesday.
"It might take longer for the China situation to be resolved," said Geoffrey Yu, head of the U.K. investment office at the wealth-management arm of UBS. The protracted negotiations with China, now likely to be extended, also "will not prevent him from pursuing other trade battles."
The U.S. on Monday moved toward opening multiple new fronts in Mr. Trump's global trade war.
The White House proposed tariffs against $2.4 billion of French imports in response to the European nation's new digital-services tax, which it said unfairly targets U.S. tech companies such as Apple and Alphabet's Google. The U.S. trade representative's office said it would accept public comments through at least Jan. 14 before moving forward with the levies.
"Tariffs will be a part of statecraft from now on," Mr. Yu said. "There are no allies when it comes to tariffs right now."
The threat to impose levies on French products came within hours of Mr. Trump saying he would revive tariffs on steel and aluminum imports from Brazil and Argentina, a move that caught investors off-guard on Monday and weighed on U.S. stocks.
Earlier in the day, trading across Asia was mixed. The Shanghai Composite Index ended the day up 0.3% while Japan's Nikkei 225 gauge fell 0.6% before Mr. Trump made his comments on the China deal.
Brent crude, the global benchmark for oil prices, gave up earlier gains and traded almost flat at $60.85 a barrel.
Later in the day, software maker Salesforce.com will report earnings after markets close in the U.S.
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