Stock markets plunge after fresh tariff threat by Donald Trump

Donald Trump. Pic/AFP

Asian and European stock markets tumbled yesterday on rising fears of a trade war after Donald Trump threatened fresh tariffs on Chinese imports and Beijing warned of countermeasures.

Frankfurt was the heaviest faller among leading European indices, shedding 1.4 percent in late morning deals, which followed a drop of 3.8 per cent for Shanghai.

Wall Street stocks also tumbled in opening trading Eyes were also on talks in Germany due between the country's Chancellor Angela Merkel and French President Emmanuel Macron on EU reform. Merkel and Macron have both stressed that the bloc must learn to stand its ground on the world stage, as Trump openly challenges the EU with a trade war and over security and climate policy.

In foreign exchange trading, the dollar dropped versus the haven yen currency, but gained versus the pound and euro. Oil prices slid ahead of a key OPEC meeting on crude output levels.