The U.S. President Donald Trump grew impatient and escalated tension on China with a threat to hike tariffs on $200 billion worth of Chinese goods in a tweet that sent panic to global financial markets on Monday.
The reason for this new threat from Trump was cited by the Wall Street Journal, said China’s government was considering canceling this week’s talks and the pace of the negotiation was going too slow. While Beijing has not responded to the matter, it once said in the previous U.S. threats that the country wouldn’t negotiate under pressure.
Trump said that he would impose the tariffs on Chinese goods by this Friday.
After the tweet, Dow Jones Future lost 1.8% and S&P 500 sank 1.6%. While the trading session on Monday did not go well for Asia and Europe markets as well. SSEC closed in a horribly way with a loss of 5.58%, HSI slipped 3.24%, ASX 200 dipped 0.82%, KOSPI lost 0.74% while NIKKEI and SET was closed during the coronation ceremony.
European markets are set for a sharp loss over the escalation of the conflict between the U.S. and China as well.
The tweet from Trump also sparked a plunge in oil prices. U.S. crude at one point dropped as much as 3.1% to a more-than-five-week low, before bouncing to $60.51 per barrel, but still off 2.3% on the day.
The offshore yuan tumbled as much as 1.3%, the most since January 2016, before paring losses to trade 0.94% lower at 6.7994 per dollar as of 11:56 a.m.