Escalating trade fight weighs on global stocks, boosts Treasuries

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Liu said that China and the European Union want to avoid such practices "impacting the global economy", Efe news reported.

The fireworks in the stock market follow an escalation in the back-and-forth threats to global trade, which suggest that investors are becoming increasingly anxious that political rhetoric is moving toward actual policy.

Even the so-called FAANG stocks - Facebook, Apple, Amazon.com, Netflix and Google - which have been largely immune to concerns about escalating trade threats exchanged between the United States and China - fell more than 2 per cent each (6.5 per cent, in the case of Netflix).

The EU riposted last week against emblematic American exports in response to USA tariffs on steel and aluminium. Back in March, President Donald Trump announced new tariffs on imported steel and aluminum.

Trump on Tuesday once again hit out at countries that had placed tariffs on United States goods, and threatened to impose even more tariffs. The forthcoming restrictions would apply "to all countries that are trying to steal our technology", he said.

The pan-European FTSEurofirst 300 index .FTEU3 lost 2.19 percent and MSCI's gauge of stocks across the globe.MIWD00000PUS shed 1.41 percent.

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But trade policy advisor Navarro, the administration's harshest China critic, has advocated a far more confrontational approach with Beijing. "Trade must be fair and no longer a one way street!"

The beef ban was imposed over a decade ago as Beijing started closing off its markets to all European imports, and later to U.S. beef imports, in the wake of the "mad cow" disease scare.

The pushback took the form of Brussels and Beijing agreeing to form a group inside the World Trade Organization dedicated to rewriting the global rules on subsidies and tech policy in the light of Trump's actions.

"In the West you have the notion that if somebody hits you on the left cheek, you turn the other cheek", the Chinese leader said, according to the WSJ report citing people briefed on1qaa the meeting. The administration could expand the existing authority of the Committee on Foreign Investment in the United States, or CFIUS, which is led by the Treasury and which already has blocked Chinese investments, in ports and semiconductors.

Spokespersons for the Treasury, Commerce Department and the White House did not immediately respond to Reuters' requests for comment on the proposed restrictions. The administration is still debating some aspects of the new investment restrictions that are set to be announced on Friday, a government official said. The Dow Jones Industrial Average ended the day down 1.3 per cent, the ninth drop in the past 10 trading days.

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