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Global stocks, oil suffer as U.S.-China trade spat heats up
![China's tariffs on U.S. oil would disrupt $1 billion monthly business]()
A potentially destabilizing vote in German Chancellor Angela Merkel’s governing coalition partner over a migration plan weighed on the euro and could put further pressure on European shares. China's tariffs on U.S. oil would disrupt $1 billion monthly business
Global stocks slid on Monday and U.S. oil prices slumped after U.S. President Donald Trump announced tariffs on Chinese goods and Beijing responded with similar measures in an escalating trade dispute.
Fears the spat between the world’s two largest economies could intensify added to pressure on oil prices, which extended Friday’s big fall into the start of week, while the dollar retreated from a seven-month high against a basket of currencies. .DXY
The MSCI world equity index .MIWD00000PUS, which tracks shares in 47 countries, fell 0.3 percent, nearing a seven-day low.
Trump announced tariffs on Friday on $50 billion of Chinese imports, including cars, starting on July 6.
China said it would retaliate immediately by slapping duties on American export products, including crude oil, and suspend all previous trade agreements with Trump’s administration.
The exchange of blows between Washington and Beijing has heightened fears of a protracted dispute that could hurt global growth and particularly Europe, given that Trump has signaled he wants to impose tariffs on automotive exports.
Those concerns saw European bourses start the week in the red, after Asian shares fell early on Monday to a 2-1/2 week low.
Futures on main euro zone benchmarks were trading down 0.2-0.5 percent as investor angst about the outlook for economic growth filtered through to European stocks.
The pan-regional STOXX 600 was on track to relinquish gains recorded on Thursday when a dovish European Central Bank pushed back expectations for an interest rate hike.
Germany's DAX .GDAXI was down 1.36 percent while France's CAC 40 .FCHI declined 1.23 percent.
“This all shows how quickly trade tensions could escalate between the U.S. and China,” said Derek Halpenny, European head of global markets research at MUFG Bank.
“It may not be the end of the matter as U.S. officials are looking at another $100 billion of Chinese imports on which they could impose tariffs if desired,” he said.
