European stocks open lower as US-China trade tensions escalate

European stocks opened sharply lower on Monday, after President Donald Trump said the U.S. would hike tariffs on goods from China.

Germany’s DAX index dropped 163 points to 12,230 while France’s CAC slipped 80 points to 5,466, according to IG. In the U.K., markets are closed due to a public holiday.

Market participants eyed with caution the latest developments in trade negotiations between the U.S. and China.

Trump said overnight that current 10% duties on $200 billion worth of Chinese goods would rise to 25% by Friday, throwing hopes of any near-term resolution into doubt. The president also said he would target a further $325 billion of Chinese imports with a 25% levy “shortly.”

Meanwhile, China is reportedly considering backing out of trade talks scheduled for this week. Sources told CNBC that Chinese Vice Premier Liu would likely cancel a trip for the final round of trade talks. Chinese officials have previously canceled a trip under similar circumstances.

The latest tariff threat saw Chinese markets and U.S. stock futures plunge Monday, as investors worried the economic damage caused by the trade dispute thus far could worsen. The MSCI Asia ex-Japan index fell as much as 2%.

Elsewhere, traders will monitor purchasing managers’ index (PMI) readings for the euro zone, which drop at 9 a.m. London time.

Source: Ahram Online