Global financial markets shook on Monday after US President Donald Trump unexpectedly put pressure on China to reach a trade deal sooner than expected.
In a tweet, Mr Trump warned he plans to hike US tariffs on Chinese goods this week and said trade talks with China were moving “too slowly”.
His comments caused equity markets to fall sharply, because they contradicted previous statements made by Trump and other senior US officials that talks were going well.
In his Tweet Trump also warned he would raise tariffs on €178 billion of Chinese goods to 25 per cent on Friday from 10 per cent. He also said he would target a further €290 billion of Chinese goods with 25 per cent tariffs “shortly”.
The trade war between the world’s two biggest economies has already caused billions of dollars in losses for both the US and China, as well as affected export-heavy economies and companies from Japan to Germany.
Chinese shares plummeted more than 6 per cent, while US stock market futures fell 1.6 percent. Oil prices sank and the Chinese yuan weakened sharply. That trend is expected to continue in Europe with the Frankfurt’s DAX to open 1.7 percent lower at 12,207, and Paris’ CAC to open down 1.6 percent at 5,462. London is closed for a bank holiday.