New York — Global stocks were mixed Wednesday (US time) following the latest volley of tariffs in the escalating trade war between the United States and China, while oil prices fell sharply.
China said it would impose 25% tariffs on a further $16 billion of US goods starting on August 23, making good on its promise to retaliate against new American levies announced late Tuesday on $16 billion in goods set to take effect the same day.
The tit-for-tat announcements marked continued acrimony between the two largest economies in the world. Investors have alternated between worries and indifference in recent weeks as the tensions have built.
“Markets had a muted reaction to China’s announcement that it plans to impose tariffs on $16 billion worth of US goods, starting on 23 August,” said market analyst David Madden at CMC Markets UK.
“The token retaliation from Beijing keeps the trade spat alive and it seems like China were doing it to send a message, rather than to inflict financial pain on the US,” he added.
Both Frankfurt and Paris stocks ended modestly lower, while London’s benchmark FTSE 100 index carved out a gain of 0.8% as the pound pulled back on continued uncertainty over Brexit.
US stocks finished little changed, with the Nasdaq eking out modest gains and the Dow and S&P 500 both falling slightly.
Asian equities stuttered, with Tokyo down 0.1 percent, Shanghai shedding 1.3 percent, but Hong Kong ending up 0.4% in value.
Oil prices, which had climbed this week on expectations that renewed US sanctions on Iran would reduce supplies to the market, fell sharply on data showing ample supplies in the United States.
“A weaker-than-expected fall in crude inventories has taken the wind out of oil’s sales,” said IG’s Chris Beauchamp.
“Signs of weaker demand in the US have trumped the bullish case for oil based on Iran tensions, which have stubbornly refused to pick up in recent days,” he added.
Some analysts also cited the flare up in US-China relations as a factor in the drop in oil prices. — AFP

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