In tit-for-tat, Trump threatens more tariffs against China

United States tariff exception

While the U.K.'s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index and the German DAX Index slumped by 1.1 percent and 1.2 percent, respectively.

Industrial and technology companies took some of the worst losses as investors anxious that the dispute could grow more intense and drag down global economic growth.

Shanghai stocks staged a modest 0.3 percent recovery after tumbling almost 4 percent on Tuesday to a two-year low, buoyed by soothing comments from the central bank chief and in state media, and a burst of share purchase plans.

BEIJING-China fired back Saturday in a spiraling trade dispute with President Donald Trump by raising import duties on a US$34 billion list of American goods including soybeans, electric cars and whiskey.

Investors sought safety in telecommunications, utilities, and other high-dividend stocks like Verizon, Procter & Gamble and Johnson & Johnson.

Goldman also adjusted its forecasts for the reserve requirement ratio in China and the rate on the country's seven-day reverse repurchase agreements, the tool of choice for the central bank in managing interbank liquidity, reflecting "an expectation of slightly easier policy going forward", they wrote.

US stocks are mostly higher Wednesday as technology and media companies lead a recovery from the turbulent trading seen the day before.

Stocks are ending mostly higher Wednesday, although the Dow Jones industrials are posting a seventh straight loss due to weakness in McDonald's and Travelers.

Sixty-two percent of companies in all industries said they had less favourable market access in China than their Chinese competitors had in Europe. Aerospace giant Boeing fell 3.4 percent and DowDuPont slipped 3.3 percent.

Shares of Chinese companies listed in the US slumped.

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"Although many think this might be another bluff from Trump, markets are likely to stay nervous to trade-related headlines for now".

Spot gold dropped 0.3 percent to $1,274.66 an ounce. The move, which went into effect March 23, was seen as targeting China particularly and included temporary exemptions that shielded US allies Canada, the European Union and Mexico.

The S&P 500 index is rising 8 points, or 0.3 percent, to 2,771.

Late Monday, Trump also announced he might pursue $200 billion (150.75 billion pounds) more in tariffs on Chinese goods, though it was unclear whether the list would include more chips or computing products that might impact Intel.

But for USA importers looking to get tariff-hit cargo from China before the July 6 deadline, it could pay to use air freight instead. But the rhetoric is intensifying, with Trump lashing out at Beijing over its threat to retaliate against the administration's latest proposed tariffs.

"You see what's happening with China", Trump said Tuesday during a speech to the National Federation of Independent Businesses. The Hang Seng index in Hong Kong lost 2.8 percent.

The Canadian dollar weakened to a one-year low of C$ 1.3237 overnight, before paring some of its losses, as investors anxious about Canada's trade feud with the United States.

The 10-year U.S. Treasury note yield touched 2.871 percent, its lowest since June 1.

USA and European equity markets looked set to follow Asia into the red.

It follows last Friday's decision to to impose 25% tariffs on $50bn of Chinese products. China, claiming the USA had "launched a trade war", retaliated immediately, outlining its own tariffs on U.S. goods worth $50 billion, including agricultural goods, cars and marine products. In April the Commerce Department blocked ZTE from buying US components for seven years, a move that amounted to a death sentence for the company.

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