Stocks are diving as the US and China struggle to schedule trade talks after ramping up tariffs

FILE PHOTO: A trader works on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 9, 2019. REUTERS/Brendan McDermid

  • European equities and US futures dropped Tuesday as traders reacted to the latest escalation in the US-China trade war and the two sides’ failure to schedule talks to resolve the dispute.
  • The Trump administration slapped tariffs on $112 billion in Chinese goods on Sunday, and China retaliated with the first of two batches of duties targeting $75 billion worth of US goods.
  • The two governments have struggled to schedule trade talks expected to take place this month. 
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European equities and US futures dropped on Tuesday as traders reacted to the latest escalation in the US-China trade war and the two sides’ failure to schedule talks to resolve the dispute.

The Trump administration slapped tariffs on $112 billion in Chinese goods on Sunday, and plans to impose duties on another $160 billion worth of Chinese products in mid-December. China retaliated with the first of two batches of duties targeting $75 billion worth of US goods.

The two governments are struggling to schedule trade talks expected to take place this month, according to Bloomberg. Two of the sticking points are the parameters for the next round of negotiations, and the US ignoring China’s request to delay tariffs over the weekend, Bloomberg said. 

“The investor mood was spoiled by the US and Chinese officials’ inability to fix a date for the next face-to-face meeting that is supposed to take place in September,” Ipek Ozkardeskaya, senior market analyst at London Capital Group, said in a morning note. “There is a rising fear that the meeting will be postponed or cancelled following the latest escalation of tensions.”

“China could get cold feet under the heavy pressure that President Trump puts on the country relentlessly,” she added. “The global trade disruptions will likely remain the main course on September’s menu.”

Here’s the market roundup as of 9:21 a.m. in London (4:21 a.m. EST):

  • European equities have dropped with Germany’s DAX and the Euro Stoxx 50 down 0.4%, while Britain’s FTSE 100 fell 0.2%.
  • US stocks are set to open lower. Futures underlying the Dow Jones Industrial Average, S&P 500, and Nasdaq slumped between 0.6% and 0.7%.
  • Asian indexes were mixed with China’s Shanghai Composite up 0.2%, Japan’s Nikkei flat, and Hong Kong’s Hang Seng down 0.7%.
  • Oil prices have dropped with West Texas Intermediate crude down 1.3% at $54.40, and Brent crude down 0.9% at $58.10.
  • Gold has climbed 0.7% t0 $1,540.

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