London share prices PLUMMET amid US-China trade war fears — FTSE latest

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China and the USA announced a truce in their trade dispute after the meeting between Trump and Chinese President Xi Jinping (習近平) on Saturday, but that quickly descended into confusion, with both sides announcing different statements on what was agreed.

"It doesn't seem like anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump's tweets (which seem if not completely fabricated then grossly exaggerated) with reality", said an investor note issued by JPMorgan.

At the start of the administration, Trump failed on that front when he pulled the United States out of the Trans-Pacific Partnership - a pact joining 12 major trading economies along the Pacific Rim in a trade agreement created to push back against China's mercantilist behavior.

Also, China's commerce ministry made no mention of the vehicle tariff cuts which Mr Trump said earlier this week China had agreed to.

But by Tuesday morning, Trump was renewing his tariff threats in a series of tweets.

Global growth was already slated to slip to 3.5% next year from 3.7% even without accounting for the risks of escalating US tariffs and China's counter-tariffs, according to estimates by the Organization for Economic Cooperation and Development, an intergovernmental think tank of 36 nations.

"Very strong signals being sent by China once they returned home from their long trip, including stops, from Argentina", he wrote.

"The United States has put forward many demands, not all of them reasonable".

The White House has alleged that China pledged to purchase a "very substantial" amount of agricultural, energy, industrial and other products from the USA, to help narrow the current trade deficit.

"Bob Lighthizer will be working closely with Steve Mnuchin, Larry Kudlow, Wilbur Ross and Peter Navarro. on seeing whether or not a REAL deal with China is actually possible", Trump wrote in part of a four-tweet message. "When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so", he added.

Canadian officials announced Wednesday that Meng Wanzhou, Huawei's chief financial officer and the daughter of the company's founder, was detained in Vancouver last Saturday on suspicion of trying to evade USA sanctions on Iran. "But if not remember, I am a Tariff Man", Mr Trump said on Twitter.

His "tariff man" declaration also contradicts assertions made by the White House that Trump preferred a deal to tariffs.

Stock markets rose on Monday after United States officials touted the agreement as a historic breakthrough.

"I think there is a higher likelihood that we get meaningful discussions now than in much of the last six months", said Kuijs.

Trump has threatened to impose tariffs worth a further $US200 billion on Chinese imports unless China makes it easier for USA companies to do business there. The changes USA officials have sought include forcing Beijing to lower tariffs on United States goods, stop dumping cheap steel and aluminium into foreign markets, and halting the theft of intellectual property, among other things.

"The president has a point", Diess said, saying officials "tried to convince us to invest more into America and we are prepared to do this".

But Kudlow said the ultimate amount will depend on market prices and the health of China's economy.

President Xi and his most senior officials are due back in China on Thursday, having visited Panama and Portugal since leaving Argentina.