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US products in China have just become a tougher sell.

Update 1: World stocks wobble as US-China trade war gets real

Fri, July 06, 2018 16:25

LONDON/ WASHINGTON, July 6, 2018 (News Wires) - Global stock markets wobbled Friday as China and the United States fired the first shots in a trade war that pits the world's two biggest economies against each other.

The euro rose against the dollar, while oil prices fell.

US President Donald Trump on Friday rolled out tariffs on $34 billion of Chinese goods in what Beijing called the "largest trade war" in economic history.

China added it had already imposed retaliatory measures on US goods without immediately providing precise details.

"By imposing tariffs on $34bn worth of US imports from China today and eliciting an immediate like-for-like response from China, US President Donald Trump is bringing the world close to a genuine trade war," said Holger Schmieding, chief economist at Berenberg.

European stocks drifted lower in the afternoon, having opened mixed, while Wall Street, too, came off to a weaker start, shrugging off a solid US jobs report.

Earlier, Asian markets saw some gains as investors went bargain-hunting, dealers reported.

Tokyo stocks led the gains in Asia, closing 1.1 percent higher, with markets in Shanghai and Hong Kong up by around half a percentage point.

Li Daxiao, analyst at Yingda Securities, said news of the tariffs had already been priced in.

"After the US tariffs announcement, the negative news finally came out and has already been digested over recent weeks. Therefore investors are not in as much of a panic as before, and the market sentiment will reverse," said Li.

Stanley Chik, from Bright Smart Securities International in Hong Kong, said that "the impact of tariffs on economic growth appears limited for now, giving the market a breathing spell."

But these could be just the first skirmishes in a long war, with financial markets worried about a knock-on effect on the wider global economy and the broader trading system.

Trump has threatened to impose tariffs on some $450 billion of Chinese goods -- virtually all of China's exports to the US -- as he seeks to advance his "America First" protectionist agenda.

Beijing has accused the US of "firing on the whole world" with the measures, pointing out that most of the Chinese goods under attack are made by companies with large foreign investment -- including American.

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