Global stocks fell on Monday, and US oil prices fell after US President Donald Trump announced tariffs on Chinese products and Beijing responded in a growing trade dispute with similar measures.
Trump announced on Friday tariffs of $50 billion in Chinese imports, including cars, beginning July 6, 2018.
China said it would respond immediately by imposing tariffs on US export products, including crude oil, and suspending all previous trade agreements with the Trump government.
The exchange of coup attempts between Beijing and Washington sparked fears over a protracted and lengthy dispute, plunging Asian stocks to a 2-1/2-week low.
European capital started to fall as investors became concerned that economic dip could drift into European capitals.
The STOXX 600 (.STOXX) fell by 0.3% and the German DAX (.GDAXI) by 0.5%, while the French CAC 40 (.FCHI) fell by 0.7%.
THE ROOM FOR COMPROMISE
China has increased its list of US products by saying it would double six times the rate of a version launched in April, but the value remained at $ 50 billion as some high-value items such as airliners were eliminated.
However, some analysts believe there is still room for compromise as Trump’s announcement was a bargaining tactic to gain Beijing’s faster concessions.
Analysts also say that the direct impact of tariffs can be limited, especially for the US economy, which is in good shape.
The immediate consequence of the dispute was limited to the foreign exchange markets. A slight dollar reaction (.DXY) suggests that swaps of coups were expected in some markets.
The Dollar Index (.DXY) rose 0.1 percent to 94,862 against a basket of six major currencies.
The index was close to 95,131, the highest level on Friday, thanks to the dollar rising more than 1% last week after the Federal Reserve gave an aggressive signal on bank interest rates Central The European was pessimistic.
The euro is trading at 1.1565 USD (EUR = EBS), not far from a two-week low of 1.1543 USD, after the European Central Bank had proposed to cut interest rate hikes next summer.
The Australian dollar (AUD = D4), a liquid risk hedge, fell to its lowest level in six weeks, while its New Zealand cousin (NZD = D4) fell to its lowest level since the end of the month. May
Asian trade-dependent economies and Chinese supply chain companies fear collateral damage as world trade slows, affects global growth and weakens the business climate.
“There are trade frictions, not just between EAs, and China, but also between the United States and its allies, and Trump could put more pressure on other countries like Japan and NATO courtiers,” said Yoshinori Shigemi, global strategist at JPMorgan Asset Management in Tokyo.
“So far, investors have fled to high-tech stocks and small-cap stocks, after all, there is still plenty of money, but investors should be careful.”