US-China trade war: Stock markets PLUNGE 200 points after Trump unveils new tariffs

Stocks began to be traded lower today as a trade war between the US and the other major economies became a reality after President Donald Trump unveiled new tariffs on Chinese goods.

President Trump published a list of Chinese goods he will give a tariff of 10 percent on, which are worth a total of £151 billion.

Experts have said that the outlook of the trade war depends on how China responds to the tariffs on its imports.

Chief investment officer at Bleakley Financial Group, Peter Boockvar, said: “At this point I’m hoping for more science in searching for a deal and less art.

“China seems to have no interest in bending and they will retaliate.”

The Dow Jones Industrial Average fell 200 points with Caterpillar DowDuPoint and Chevron being the biggest markets to plunge.

The FTSE 100 finished 100.08 points or 1.3 percent lower and Germany’s Dax fell 1.53 percent.

The S&P 500 dropped 0.7 percent as energy, materials and industrials all fell more than one percent.

Head of US equity strategy at JP Morgan, Dubravko Lakos-Bujas, said: “Despite trade headlines, S&P 500 companies should deliver robust earnings on above-trend revenue growth and sharply higher margins.

“While weaker overseas growth, stronger USD, and trade risks warrant some caution, consensus is likely too conservative considering rising disposable income (i.e., tax savings and expanding labor market) and lower household expenses (e.g., declining cost of goods/services including utilities).

“Also, sales growth should benefit from expanding labor market, rising business investment, expanding government spending, and higher oil prices.”

Oliver Jones from Capital Economics has warned that China’s response to Trump’s latest tariff threat could hit the US stock market hard.

He said: “Chinese equities were amongst the worst performers today, with the Shanghai Composite dropping 1.8% after the US Trade Representative set out the $200bn of Chinese imports on which it intends to impose a 10% tariff. In contrast, the US S&P 500 has so far fallen by much less. But China’s reaction to the US tariffs could pose a far greater threat to the index in time.”

A final decision on the products to be hit with the new tariffs is expected following a consultation period in August.

China’ s Ministry of Commerce said that the tariffs are “totally unacceptable” and it is hurting the entire world, as well as China.