Global equities mostly retreated yesterday after US President Donald Trump warned there was no deadline for doing a trade deal with China.
The announcement added to trade uncertainty already stoked by the United States reimposing tariffs on Argentina and Brazil, threatening France with steep levies – and warning China of possible new measures if ongoing talks fall through.
Trump, in Britain for a Nato summit, warned that efforts to resolve a trade dispute could wait until after next November’s US election.
“I have no deadline,” Trump told reporters upon his arrival.
“In some ways I like the idea of waiting until after the election for the China deal.”
In Europe, equity markets mostly retreated yesterday.  London’s FTSE 100 was down1.8% to 7,158.76 points, Frankfurt’s DAX 30 gained 0.2% to 12,989.29 and 
Paris’s CAC 40 lost 1% to 5,727.22 points at the close yesterday.
Trump’s trade war with China and on-again off-again attempts to reach a deal have destabilised markets and stoked geopolitical tensions.
“The chances of a deal by December 15 just took another turn lower,” said markets.com analyst Neil Wilson.
“After weeks of making generally positive noises on a deal being very close, there is a real sense now that a deal is not so very near at all and markets need to reprice,” Wilson added.
As recently as last week Trump boasted that he was in the “final throes” of negotiating “one of the most important deals in trade ever”. But Washington has since courted Chinese anger by expressing support for Hong Kong protesters.
Optimism that Beijing and Washington will eventually hammer out a partial agreement as part of a wider deal had supported equities for weeks, helping Wall Street to set numerous records.
But investor sentiment was dealt a blow on Monday when Trump said he would reinstate tariffs on steel and aluminium from Argentina and Brazil whom he accused of manipulating their currencies and hurting US farmers.
Later, officials warned they would also hit France with up to 100% levies on $2.4bn in goods, saying a French digital tax was discriminatory against US tech firms such as Google, Apple and Amazon.
Sparkling wine, yoghurt and Roquefort cheese could be affected as soon as next month, while US Trade Representative Robert Lighthizer warned his office was also considering similar moves against Austria, Italy, and Turkey.
Yesterday, France vowed a “strong” response to any tariffs.
Oil prices were firmer ahead of a key meeting of Opec and other major producers, which is expected to see them maintain output cuts into June, with speculation they could go on until the end of 2020.
Meanwhile, the British pound climbed to its highest levels in six weeks yesterday against the backdrop of broad-based dollar weakness and after a new poll showed the ruling Conservative Party widening its lead before next week’s election.
Prime Minister Boris Johnson’s Conservatives led the main opposition Labour party by 12 points, a survey by Kantar showed yesterday, before a parliamentary election on December 12.
Analysts said the news bought some relief to currency markets, after recent polls pointed to an increased chance of a hung parliament, where no one party has an absolute majority.
“The fresh poll result is pushing the pound higher with the dollar’s weakness also playing a part,” said Lee Hardman, a currency strategist at MUFG in London.
Against the dollar, the pound rose as much as 0.5% to $1.3010, its highest level in six weeks and within a whisker of reaching its highest since May.
Sterling meanwhile gained 0.4% versus the euro to 85.13 pence.
Sterling has gained more than 6% from a September 3 low as markets cut the risks of a no-deal Brexit.
But gains have stalled in the past month as election uncertainty has risen, including the prospect of victory for Labour, which has set out plans for tax increases for the wealthy and some nationalisations.
While Johnson wants to implement an exit deal he has already agreed with Brussels and leave the European Union in January, Labour is promising to negotiate a new exit deal and put it to the public at a second referendum next year, another potential source of uncertainty.
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