“The equity markets are getting clobbered, which is not that surprising with fears of a trade war breaking out”  – Paul Fage, TD Securities

Global equities are melting as they take the full brunt of market worries of a rising trade war after China announced it plans $3BN in tariffs on US imports in retaliation to the $50BN in US sanctions, while the latest personnel turnover in the White House (Dowd, McMaster) add to fears of rising political uncertainty.

World stocks are down 3.4% since Monday, are on course for their worst week since early February, when a spike in volatility sent markets into a tailspin.

S&P futures are trading in the red, down 9 ticks as VIX make a trip back to the 25 handle.

Trade Wars

• Overnight, China announced it plans tariffs on USD 3bln of US imports, in which it plans 15% tariffs on US steel pipes, wine and fruits, while it also plans tariffs of 25% on US pork and pork products. Furthermore, there were also comments from Mofcom that China doesn’t want a trade war but is not afraid of one, while the ministry added it hopes US will be prudent in its decisions and pulls back from the ‘brink’.
• Russia’s Ministry of Trade and Industry said they are preparing restrictions on US imports as a response to US aluminium and steel tariffs.
• EU’s Tusk states that EU leaders have called for a permanent exemption from US tariffs.
• The US launched a WTO complaint over China’s “discriminatory technology licensing requirements”.
• Source reports indicate that China intervened overnight to support its stock market after tariff announcements triggered losses.

Overnight, China announced retaliation against President Donald Trump’s tariffs and there was further turnover in the U.S. administration, compounding a selloff that started in technology shares and escalated when the White House unveiled its protectionist agenda on Thursday.

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