Trump threatens tariff rise in China trade dispute
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
A look at Donald Trump’s Twitter feed is enough to tell you that the US president has other things (impeachment) on his mind, but behind the scenes the wheels are still turning on trade negotiations between the US and China.
And Trump’s feelings on the matter are still market critical: east Asian indices fell across the board on Wednesday morning following a threat of raising tariffs higher. The CSI 300 index, which measures the performance of stocks in Shenzhen and Shanghai, lost 0.99%, while the Hang Seng index in Hong Kong lost 0.71% and Japan’s Nikkei 225 fell by 0.62%.
Speaking at a cabinet meeting at the White House, Trump said he had a good relationship with China, noting that China was “moving along.” However, he said China would have to make a deal “I like.” He said:
If we don’t make a deal with China, I’ll just raise the tariffs even higher.
Investor money flowed to safe-haven bonds in response. Yields on US 10-year Treasuries hit a two-week trough of 1.75%, as demand rose: yields move inversely to prices.
That has set the tone for Europe, where futures indicate that stocks on the main indices are likely to fall in value.
In UK corporate news, B&Q owner Kingfisher reported like-for-like sales down by 3.7%, and new chief executive Thierry Garnier made it clear that the company has some upheaval ahead.
My early assessment is that we have not found the right balance between getting the benefits of Group scale and staying close to local markets. We are suffering from organisational complexity, and we are trying to do too much at once with multiple large-scale initiatives running in parallel.
- 8am GMT: Germany producer price inflation (October)
- 10am GMT: European Central Bank financial stability review
- 2:30pm GMT: Canada inflation rate (October)