Stock markets fall sharply on Trump's new Mexico tariffs
Global stocks fell sharply on Friday after U.S. President Donald Trump announced more tariffs on imports from Mexico, magnifying concerns about the economic impact of U.S. trade disputes around the world.
Germany's DAX tumbled nearly 2% to 11,674, while France's CAC 40 shed 1.6% in midday trading to 5,165. Britain's FTSE 100 slid more than 1% 7,145.
U.S. shares were also headed for a lower open, with Dow futures down 1.1% at 24,914 and S&P 500 futures falling by the same rate to 2,758.
Trump on Thursday announced a new 5% tariff on all Mexican imports aimed at pressuring Mexico to halt the flow of migrants into the U.S. The tariff, to be effective June 10, would increase each month if Trump is not satisfied by Mexico's efforts on border security.
The White House laid out an escalating schedule of tariff increases if Trump's demands are not met: 10% on July 1, 15% on Aug. 1, 20% on Sept. 1 and 25% on Oct. 1.
Trade concerns are likely to continue through late June, when U.S. and Chinese leaders will have an opportunity to meet at the G-20 summit in Japan.
In early May, the U.S. and China concluded their 11th round of trade talks with no agreement. The U.S. then more than doubled duties on $200 billion in Chinese products, and China responded by raising its own tariffs.
Meanwhile, a report released Friday showed that China's factory activity contracted in May amid its trade dispute with the U.S. that has seen higher tariffs on Chinese exports.
"Trade war tail risks are impacting an increasing share of the U.S. and global economy," said Ethan Harris, global economist at Bank of American Merrill Lynch.
Earlier, in Asia, Japan's benchmark Nikkei 225 dropped 1.6% to finish at 20,601.19, while Australia's S&P/ASX 200 inched up nearly 0.1% to 6,396.90. South Korea's Kospi gained 0.1% to 2,041.74.
Hong Kong's Hang Seng fell 0.8% to 26,901.09, while the Shanghai Composite lost 0.2% to 2,898.70.
ENERGY: Benchmark U.S. crude fell $1.07 to $55.52 a barrel. It skidded 3.8% to settle at $56.59 a barrel Thursday. Brent crude oil, the international standard, slipped $1.36 to $63.97 per barrel.
CURRENCIES: The dollar fell to 108.82 Japanese yen from 109.69 yen on Thursday. The euro rose to $1.1142 from $1.1138.
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