Global shares retreat on US trade tension with China, France

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December 03, 2019 - 7:55 am

FILE - In this Nov. 14, 2019, file photo specialist James Denaro, right, works with traders at his post on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EST on Monday, Dec. 2. (AP Photo/Richard Drew, File)

TOKYO (AP) — Global shares mostly fell Tuesday amid renewed concerns over trade, with tensions between the U.S. and France and pessimism over a standoff between the U.S. and China.

The Trump administration has proposed tariffs on $2.4 billion in goods in retaliation for a French tax on global tech giants including Google, Amazon and Facebook.

France’s finance minister threatened a “strong European riposte” if the U.S. follows through on a proposal to hit French cheese, Champagne, handbags and other products with tariffs of up to 100%.

The move is likely to increase tensions between the U.S. and Europe - and set the stage for a likely tense meeting Tuesday between President Donald Trump and French President Emmanuel Macron.

France’s CAC 40 fell 0.3% to 5,770, while Britain’s FTSE 100 tumbled nearly 1% 7,216. Germany’s DAX gained 0.6% to 13,045.

U.S. shares were headed for losses at the open, with Dow futures slipping 0.4% to 27,684. S&P 500 futures lost 0.3% to 3,105.

In Asia, tensions flared after China retaliated for U.S. support of protesters in Hong Kong, putting investors in a selling mood. Asian regional markets are generally hurt by declines in trade and the slowdown in the Chinese economy that might cause.

Japan’s benchmark Nikkei 225 lost 0.6% to finish at 23,379.81. Australia’s S&P/ASX 200 slid 2.2% to 6,712.30. South Korea’s Kospi declined 0.4% to 2,084.07. Hong Kong’s Hang Seng fell 0.2% to 26,391.30, while the Shanghai Composite recovered earlier losses to inch up 0.3% to 2,884.70.

Investors have been hoping that the world’s two biggest economies can make progress toward at least staving off new tariffs scheduled for Dec. 15 on $160 billion worth of Chinese products, including smartphones and laptops. Negotiations on ending the longstanding trade war could face a tougher path this month following the flareup over Hong Kong.

China said Monday it will suspend U.S. military ship and aircraft visits to the semi-autonomous territory. It also plans to sanction several American pro-democracy groups in retaliation for the passage of legislation supporting monthslong anti-government protests.

The law, signed last Wednesday by President Donald Trump, mandates sanctions on Chinese and Hong Kong officials who carry out human rights abuses and requires an annual review of the favorable trade status that Washington grants Hong Kong.

“Perhaps the market will now hold the champagne corks that it has been popping for months now in expectation that all is well,” Rabobank said in a report.

ENERGY: Benchmark crude oil inched down 2 cents to $55.94 a barrel in electronic trading on the New York Mercantile Exchange. It rose 79 cents to $55.96 a barrel on Monday. Brent crude oil, the international standard, declined 13 cents to $60.79 a barrel.

CURRENCIES: The dollar slipped to 108.84 Japanese yen from 109.00 yen on Monday. The euro was down slightly at $1.1076.


Matt Ott in Washington contributed to this report.

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