Assoicated Press/Alex Brandon
- US stocks slid on Tuesday after the Trump administration threatened to slap tariffs on $4 billion worth of EU goods in retaliation for the union’s subsidies to Airbus.
- The news “dented the market sentiment” that had been lifted by the recent truce in the US-China trade war, one analyst said.
- The US Trade Representative’s office has already targeted $21 billion of EU products for potential duties.
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Traders were jittery on Tuesday after the the Trump administration threatened to slap tariffs on $4 billion of meat, cheese, and other EU goods in retaliation for the union’s subsidies to aircraft-manufacturer Airbus. While US futures fell, European stocks were mixed. Airbus fell 0.3%.
Traders’ optimism had been lifted after Donald Trump and Xi Jinping struck a truce in the US-China trade war over the weekend, but the prospect of another trade war between the US and Europe “dented the market sentiment,” said Konstantinos Anthis, head of research at ADSS. Trump’s demand that a trade agreement with China would need to be “somewhat tilted” in America’s favor further dampened the mood.
The US Trade Representative’s office added the EU products to its list of $21 billion of eurozone goods that it has targeted for potential tariffs, in response to the harm caused to the US by Airbus subsidies. “The EU has taken advantage of the U.S. on trade for many years,” Trump tweeted in April. “It will soon stop!”
Here’s the market roundup as of 1 p.m. ET:
- US stocks have drifted lower with the Dow Jones Industrial Average and S&P 500 down 0.2%, and the Nasdaq down 0.3%.
- European equities were mixed with Germany’s DAX flat, the Euro Stoxx 50 up 0.3%, and Britain’s FTSE 100 up 0.8%.
- Asian indexes were also mixed with the Shanghai Composite slightly down, Japan’s Nikkei flat, and Hong Kong’s Hang Seng up 1.2%.
- Crude oil prices fell sharply with West Texas Intermediate crude down 3.1% at $57.20 a barrel, and Brent crude down 2.6% at $63.40.
- Gold climbed 1.4% t0 $1,408 as investors shifted money to the haven asset.
- Bitcoin was up 2.2% at $10,570.