Global stocks sink after Trump threatens more China tariffs

BEIJING (AP) — Global stocks sank Wednesday after U.S. President Donald Trump threatened more tariff hikes on Chinese imports if talks aimed at ending a trade war fail to produce an interim agreement.

Market benchmarks in London, Frankfurt, Shanghai and Tokyo declined. Wall Street looked set to slip.

Trump said Tuesday that an agreement on the “Phase 1” deal announced last month “could happen soon.” But he warned he was ready to raise tariffs “very substantially” if that fails.

The two sides disagree publicly about whether the U.S. agreed to roll back some punitive tariffs imposed in the fight over Beijing’s trade surplus and technology ambitions. The Chinese government said last week that was settled, but Trump denied that.

Trump’s comments “served as a reminder of the challenge that the two sides face,” said Jingyi Pan of IG in a report. However, she said, investors saw them as “positioning statements,” reducing their impact.

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In midday trading, London’s FTSE 100 declined 0.5% to 7,331 and Frankfurt’s DAX lost 0.7% to 13,186. France’s CAC 40 shed 0.4% to 5,894. On Wall Street, futures for the benchmark Standard & Poor’s 500 index and the Dow Jones Industrial Average were each down 0.4%.

In Asia, the Shanghai Composite Index lost 0.3% to 2,905.24 and Tokyo’s Nikkei 225 sank 0.9% to 23,319.87. Hong Kong’s Hang Seng tumbled 1.8% to 26,571.46.

South Korea’s Kospi retreated 0.9% to 2,122.45 and Australia’s S&P-ASX 200 sank 0.8% at 6,698.40. India’s Sensex lost 0.3% to 40,215.20.

Hong Kong shares, already under pressure from the U.S.-China tariff war and slowing global demand, have been jolted by growing violence in anti-government protests.

The protests began in June over a proposed extradition law and expanded to include demands for greater democracy and other grievances. Hong Kong tumbled into its first recession in a decade in the latest quarter.

Momentum for the global stock market has been mostly upward for more than five weeks as worries about the U.S.-China trade war have eased.

This week, the U.S. Labor Department is due to give updates on consumer and wholesale inflation. Economists expect a government report to show retail sales returned to growth in October.