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LONDON - Global markets were getting hammered Wednesday as the trade war between the Trump administration and China intensified, with fears also rising that President Donald Trump could pull the US out of the NATO military alliance.
The US administration late on Tuesday released a huge list of new Chinese products subject to tariffs.
The US said it would be introducing tariffs of 10% to $200 billion worth of Chinese goods including seafood and other fresh goods, according to the list released by US Trade Representative Robert Lighthizer. He cited China's retaliation to new tariffs already imposed by the US on $34 billion worth of Chinese goods.
"As a result of China's retaliation and failure to change its practices, the president has ordered USTR to begin the process of imposing tariffs of 10% on an additional $200 billion of Chinese imports," Lighthizer said.
That intensification of the trade conflict, which commentators are increasingly calling a full-scale trade war, has investors spooked about the future of the global world order and the global economy, pushing stock markets around the world deep into the red.
Market drops started in Asia overnight, with all of China and Hong Kong's share indexes losing more than 1%. Turmoil spread to Europe as markets opened. In midafternoon trading, all major European indexes were also nursing losses of more than 1%.
As US markets opened, stocks stateside also fell, with the three major indexes losing about 0.5% in the first few minutes of trade. They have remained under pressure throughout the session.
"Overnight, that unnerving trade war silence from the White House, which allowed stocks across the globe to charge higher in recent sessions, was broken," Jasper Lawler, the head of research at London Capital Group, wrote in an email. "The US upped the stakes in the trade war with China, sending equity markets tumbling, as risk off prevails."
Here's the scoreboard of the biggest players in Europe as of 2:35 p.m. BST (9:35 a.m. ET):
Unfortunately for markets, no end is in sight, with further retaliatory levies almost certain to be enacted by China in the coming days or weeks.
After the list was released, China's Commerce Ministry said in a statement that it could not accept the additional tariffs proposed by the US, adding that it was "shocked" by the decision.
It also said China would respond to the US actions.
Though the trade conflict remains front and center in the minds of investors, another factor at play is the nagging worry that Trump may want to pull the US out of the North Atlantic Treaty Organization - a move that would represent a fundamental upheaval in the international order and would surely affect markets.
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