Trade war tensions hit growth globally

Bengaluru/ Hong Kong, July 2: Manufacturing activity took a hit in June across Europe and Asia, with exporters losing momentum even before promised trade tariffs kick in, underscoring worries the US administration’s protectionist policies could derail global growth.

Donald Trump has threatened tariffs on European cars on top of duties he imposed on steel imports from the European Union. There are also fears that a trade standoff between China and the US could harm manufacturers who rely on the world’s two largest economies for growth.

Stocks, the euro and oil prices fell as the data were the latest to suggest world growth may have peaked. The recent economic strain is likely to intensify as the effects of the heated China- U. S trade spat ripple through global supply chains.

Weak export sales and stumbling new orders knocked euro zone factory growth in June. IHS Markit’s May final manufacturing Purchasing Managers’ Index for the bloc slipped for a sixth month, falling to an 18- month low of 54.9.

German factory growth slipped to an 18- month low and French manufacturing activity slowed more than previously thought in June to its weakest pace in nearly 11/ 2 years.

While British factories kept up a steady pace of growth, fears of a global trade war and worries about stalled negotiations with Brussels on leaving the EU knocked a gauge of confidence about the outlook down to a sevenmonth low.

“Today’s numbers continue to corroborate that manufacturing settled into a lower gear in the first half of the year,” said Neal Kilbane, senior economist at Oxford Economics. “The very real threat of the current trade dispute with the US escalating further means that Europe’s manufacturers are likely to have to negotiate stormy waters for the rest of year.”

■ The slowdown was broad- based across not just Europe but most of Asia as well