European stock markets avoid fallout from US-China trade war blowout
US shares were hit sideways but European markets were relatively unscathed as President Donald Trump insisted he was in no rush to settle the China trade spat.
It comes after the White House carried through on its threat to increase tariffs to 25% on a huge range of goods worth $200bn from car parts to eggs the US imports from China.
There are fears that China will retaliate and set the world further down the road towards protectionism.
As US stock indices fell, European stock markets fared better, with both the Cac in Paris and the Dax in Frankfurt posting small gains.
In Ireland, CRH shares, which can be exposed to the growth in the world economy, were little changed.
“Donald Trump’s insistence that there is no need to rush highlights a further drawing out of trade talks, with US stocks falling as a result,” said Josh Mahony at online broker IG.
“Trump’s trade war is rumbling on yet again, with hopes of a quick solution being dashed amid his claim that there is ‘no need to rush’ US-China talks,” he said.
German think tank Ifo said that its survey of 1,130 international experts show they fear for the fallout of the escalating US-China spat on world trade.
“When asked to name the most significant consequence of the higher tariffs, the predominant answer was ‘less trade’, Ifo said.
“In all regions of the world, with the exception of the Middle East and North Africa, more than 50% of respondents see their national economies being affected by the current trade disputes. More than 75% of the experts in the European Union, other advanced economies, and Latin America say this is the case; in Germany and the Netherlands, more than 90% of the experts say that the escalating trade disputes are affecting their country,” according to the survey.
President Trump defended the tariff hike and said he was in “absolutely no rush” to finalise a deal, adding that the US economy would gain more from the levies than any agreement.
“Tariffs will bring in FAR MORE wealth to our country than even a phenomenal deal of the traditional kind,” President Trump said in one of the tweets.
Meanwhile, sterling fell to 86.32 pence agains the euro amid continuing doubts that Brexit negotiations between the Conservative and Labour parties would get anywhere.
