Trade war hits China markets

CHINESE stocks dropped sharply after Donald Trump threatened new tariffs on the country.

The US President tweeted late on Sunday night that he would raise tariffs on more than £150bn worth of goods imported from China.

His original 10pc tariff, imposed in September, covered items ranging from chemicals to textiles and consumer goods. But Trump also threatened to impose a 25pc tariff on another £250bn of goods from China which are currently not subject to punishing duties.

His threats alarmed investors who had been expecting both sides to agree on a trade deal, after Trump said last week that talks were going ‘pretty well’.

China’s SSE Composite Index, which includes all the stocks traded on the Shanghai Stock Exchange, slid by 5.6pc. The Shenzhen Stock Exchange Composite Index, which is smaller and typically includes more entrepreneurial companies, fell by 7.4pc.

Trump tweeted: ‘The trade deal with China continues, but too slowly, as they attempt to renegotiate. No!’ The price of gold rose as investors sought to protect their money, while the Dow Jones was down just 0.25pc as Wall Street analysts said the tariff hikes were unlikely to come into force.