Global stock indexes slump as Trump threatens more China tariffs

Global stock markets slumped Tuesday after President Donald Trump threatened to put tariffs on another $200 billion USin imports from China, and the Chinese government said it would retaliate, bringing tensions between the world's two largest economies closer to a boil.

The Dow Jones industrial average lost 287.26 points, or 1.2per cent, while the S&P/TSX composite index was off by 0.4 per cent.

The Hang Seng index in Hong Kong lost 2.8 per cent. Major stock indexes in Asia and Europe also took sharp losses. Trump's new proposal calls for a 10 per cent tariff on $200 billion US in goods, and Beijing said it would respond with "comprehensive measures." It doesn't import enough goods from the U.S. to match the scale of Trump's proposal but could adopt other methods.

Last week Trump ordered a 25 per cent tax on $34 billion USin Chinese imports and Beijing matched that total. Those tariffs won't take effect until July 6, which leaves more time for the two countries to negotiate.

The Dow finished at 24,700.21.The S&P 500 index ended at 2,762.57, down11.18points, or0.4 per cent, whileNasdaq composite fell 0.3per cent, or 21.44points to hit 7,725.58.

In Toronto, the S&P/TSXcomposite index ended the trading session at16,316.53, off by 67.1 points.

David Baskin, the president of Baskin Wealth Management, pointed out that the Dow Jones industrial average is down about 2,000 points, or about eight per cent,from its all-time high reached in January. That's in the face of "terrific" corporate profits, and very accommodative fiscal and monetary policy, he said.

"Why is the Dow Jones 2,000 points off its high? I don't think you can point to anything except this trade problem.
Baskin said.

In Europe, Germany's DAX was down 1.2per cent. The CAC 40 of France fell 1.1per cent and in London the FTSE 100 lost 0.4per cent.

The losses were even heavier in Asia, where Tokyo's Nikkei 225 retreated 1.8 per cent and Seoul's Kospi gave up 1.5 per cent. Indexes in Australia and India took smaller losses.

Industrial and technology companies took some of the worst losses as investors worried that the dispute could grow more intense and drag down global economic growth. Trump accused Beijing of being unwilling to resolve the dispute over complaints it steals or pressures foreign companies to hand over technology. China's Commerce Ministry criticized the White House action as blackmail and said Beijing was ready to retaliate.

Aerospace company Boeing dropped 3.9per cent to $341.12 US and construction and mining equipment maker Caterpillar dipped by 3.6 per cent $143.30. Apple fell 1.6 per cent to $185.69 and Facebook gave up 0.4per cent, ending at $197.49.

Automakers fell sharply. GM sank 3.9 per cent to $42.26 while Tesla slumped 4.9 per cent to $352.55,and Ford retreated 0.8per cent to close at $11.89.

Shares of Chinese companies listed in the U.S. also slumped. E-commerce company JD.com lost 4.3per cent to $41.89 and its competitor Alibaba slid two per cent to $204.43. Search engine Baidu declined 2.5 per cent, finishing at $262.11.

Oil prices turned lower, with U.S. crude down the most. It fell 79 cents to close at$64.90 US per barrel in New York, and Brent crude, the international standard for oil prices, fell 17cents to $75.17USa barrel in London.