Global equities mostly retreated Tuesday after US President Donald Trump warned there was no deadline for doing a trade deal with China.
The announcement added to trade uncertainty already stoked by the United States reimposing tariffs on Argentina and Brazil, threatening France with steep levies -- and warning China of possible new measures if ongoing talks fall through.
Trump, in Britain for a NATO summit, warned that efforts to resolve a trade dispute could wait until after next November's US election.
"I have no deadline," Trump told reporters upon his arrival.
"In some ways I like the idea of waiting until after the election for the China deal." Trump's trade war with China and on-again off-again attempts to reach a deal have destabilised markets and stoked geopolitical tensions.
"The chances of a deal by December 15 just took another turn lower," said Markets.com analyst Neil Wilson.
"After weeks of making generally positive noises on a deal being very close, there is a real sense now that a deal is not so very near at all and markets need to reprice," Wilson added.
As recently as last week Trump boasted that he was in the "final throes" of negotiating "one of the most important deals in trade ever".
But Washington has since courted Chinese anger by expressing support for Hong Kong protesters.
Optimism that Beijing and Washington will eventually hammer out a partial agreement as part of a wider deal had supported equities for weeks, helping Wall Street to set numerous records.
But investor sentiment was dealt a blow on Monday when Trump said he would reinstate tariffs on steel and aluminium from Argentina and Brazil whom he accused of manipulating their currencies and hurting US farmers.
Later, officials warned they would also hit France with up to 100 percent levies on USD 2.4 billion in goods, saying a French digital tax was discriminatory against US tech firms such as Google, Apple and Amazon.
Sparkling wine, yoghurt and Roquefort cheese could be affected as soon as next month, while US Trade Representative Robert Lighthizer warned his office was also considering similar moves against Austria, Italy, and Turkey.
On Tuesday, France vowed a "strong" response to any tariffs.
Among industrial sectors, London-listed mining companies retreated on worries over demand from Asian powerhouse China, which is a top consumer of many commodities.
Britain's banks also dropped after Moody's ratings agency changed the banking system's overall outlook from stable to negative, citing weak economic growth and "prolonged uncertainty" surrounding Brexit.
In commodities, oil prices were steady ahead of a key meeting of OPEC and other major producers, which is expected to see them maintain output cuts into June, with speculation they could go on until the end of 2020.
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