Global markets fell after US President Donald Trump announced plans to escalate his global trade war, by threatening Europe with further tariffs.
Also contributing to the market anxiety was the International Monetary Fund’s (IMF) latest report, which downgraded its expectations for global economic growth — with Australia’s economy in particular underperforming.
On Wall Street, the Dow Jones index fell 190 points, down 0.7 per cent to 26,151. The S&P 500 and Nasdaq indices each finished 0.6 per cent lower.
On Tuesday (local time), Trump said he would impose tariffs on $US11 billion worth of European Union imports, heightening tensions over a long-running transatlantic aircraft subsidy dispute.
Trump’s public attack on the EU came even as his administration has yet to hammer out trade deals with China, and its neighbours Mexico and Canada.
Europe has accused the US of granting illegal aid to Boeing, offering it an unfair advantage in the global aviation business — while the US has accused Europe of the same thing, but in relation to the Netherlands-based Airbus. The case, which has been grinding its way through the World Trade Organisation (WTO) for almost 15 years, is approaching the final stages of arbitration.
Both sides have won partial victories in claiming Airbus and Boeing received unlawful subsidies but disagree on the amount involved and whether each has complied with earlier WTO rulings.
“The World Trade Organisation finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products!” Trump said on Twitter.
In response, the European Commission said it was preparing to retaliate against the US.
“The Commission is starting preparations so that the EU can promptly take action based on the arbitrator’s decision on retaliation rights in this case,” a European Commission spokesman said.
0 comments: