It’s crunch time in Washington as trade talks resume (STR)

New York (AFP) – World stock markets fell again on Thursday as Washington and Beijing worked to avert the collapse of negotiations to end their trade war.

After months in which Washington and Beijing appeared to be moving closer to an agreement, that rosy scenario looked almost out of reach as American officials announced an increase in tariffs and accused their Chinese counterparts of backsliding in the talks.

During a campaign appearance in Florida Thursday night, Trump said China “broke the deal” in ways that merited higher tariffs.

Chinese Commerce Ministry spokesman Gao Feng countered by saying China had honored its commitments and “has already prepared for all possible situations,” suggesting likely countermeasures to new or higher US tariffs.

Global markets tanked on these developments, with leading bourses in Asia and Europe losing around one percent or more.

The US was also on track for a bruising session, but cut losses around midday after Trump told reporters a deal with China was still possible, even as he indicated he was also happy to impose new tariff measures on Friday.

“I am different than a lot of people. I happen to think that tariffs, for our country, are very powerful,” Trump said.

The S&P 500 finished at 2,870.72, down 0.3 percent, its fourth straight decline.

A note from Eurasia Group said the Chinese were unlikely to give enough ground during the two-day session to satisfy the American side and that the stock market’s reaction will be important in determining what happens next.

“Trump has not yet been fully tested by equities,” Eurasia Group said. “This may change as investors gauge the seriousness of his threats — both to raise tariff rates, and to impose tariffs on the remainder of US imports from China.”

“A major stock downturn, as well as signs of further distress for US farmers and other parts of his political base, will make him more inclined to look for an off-ramp with (Chinese President Xi Jinping).”

 – Key figures around 2050 GMT – 

New York – Dow: DOWN 0.5 percent at 25,828.36 (close)

New York – S&P 500: DOWN 0.3 percent at 2,870.72 (close)

New York – Nasdaq: DOWN 0.4 percent at 7,910.59 (close)

London – FTSE 100: DOWN 0.9 percent at 7,207.41 (close)

Frankfurt – DAX 30: DOWN 1.7 percent at 11,973.92 (close)

Paris – CAC 40: DOWN 1.9 percent at 5,313.16 (close)

EURO STOXX 50: DOWN 2.0 percent at 3,347.71 (close)

Tokyo – Nikkei 225: DOWN 0.9 percent at 21,402.13 (close)

Hong Kong – Hang Seng: DOWN 2.4 percent at 28,311.07 (close)

Shanghai – Composite: DOWN 1.5 percent at 2,850.95 (close)

Euro/dollar: UP at $1.1218 from $1.1192 at 2100 GMT

Pound/dollar: UP at $1.3011 from $1.3006 

Dollar/yen: DOWN at 109.71 yen from 110.10 yen

Oil – Brent Crude: UP 2 cents at $70.39 per barrel

Oil – West Texas Intermediate: DOWN 42 cents at $61.70 per barrel

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Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.