European markets worsened Monday, carrying over from the heightened U.S.-China trade dispute last week.
President Trump announced that the two sides may not head into negotiations in September, pushing the deadline further away and increasing market volatility, according to MarketWatch.
The pan-European Stoxx 600 closed at a low 0.3%, U.K.’s FTSE 100 index showed the heaviest impact but banks were the biggest losers of the day, according to CNBC. President Trump’s national security advisor, John Bolton, is in London this week to discuss Britain’s role in the negotiations. It is expected Bolton will promote Britain to take a tougher position on Huawei, the Chinese telecommunications firm that is an economic international powerhouse. Granting Huawei licenses to do business in the US is a stake in the deal because Huawei needs access to US tech companies to reach its full potential. (RELATED: Trump’s DOJ Charges Huawei With Fraud Amid Heightened Tensions With US)
This past week the President said he would add tariffs on nearly all Chinese goods imported to the US. In his tweet, the President stated, starting September 1 the US will put “a small additional tariff of 10% on the remaining 300 Billion Dollars worth of goods and products coming from China into into our Country.”
Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal. We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to…
— Donald J. Trump (@realDonaldTrump) August 1, 2019
Following this announcement, China allowed its currency to plummet below 7 yuan per dollar, the lowest value since the 2008 financial crisis. Due to U.S. exposure to China, the U.S. markets took a hit and reported losses of the Dow Jones Industrial Average falling more than 900 points, S&P falling by 3% and the tech-savvy Nasdaq Composite falling by 3.5%. (RELATED: US Economic Growth Hits 3.2 Percent In 2019)
President Trump declared China a currency manipulator in a tweet last week that seemed to be motivated by policy concerns. On Friday, the President said he was not ready to make a deal with China and was raising doubts about continuing trade negotiations ins September. “We’re not ready to make a deal, but we’ll see what happens,” he said. “We’ll see whether or not we keep our meeting in September.”