By Ankur Banerjee
(Reuters) - Wall Street was set to open lower on Monday, pressured by fears of an escalating trade dispute between the United States and China after Beijing responded to import tariffs imposed by President Donald Trump.
In response to Trump's $50 billion in tariffs on Chinese goods, Beijing retaliated immediately by slapping duties on American export products, including crude oil, and suspended all previous trade agreements with Trump's administration.
Global financial markets have struggled since February in the face of signs that Washington and Beijing were headed toward a trade war after several rounds of negotiations failed to resolve U.S. complaints over Chinese industrial policy, market access and a $375 billion trade gap.
Shares of manufacturers Boeing and Caterpillar were down around 1 percent and 1.2 percent respectively in premarket trading.
Oil prices, which were lower in early global trading, steadied ahead of an OPEC meeting where top suppliers Saudi Arabia and Russia are expected to agree to increase global crude supply.
"When you have a combination of concerns over trade, in particularly over China, and the possibility of more oil production coming on line, it's not surprising to see the kind of reaction we're seeing right now," said Art Hogan, chief market strategist, B. Riley FBR in New York.
"The trade war is definitely on the front burner right now, and will continue to be in the absence of news catalysts and unless something substantially changes," he added.
Investors are also assessing the impact of tightening monetary policy by central banks after the U.S. Federal Reserve raised interest rate last week and the European Central Bank said it planned to end its bond-purchase program at year-end.
At 8:18 a.m. ET, Dow e-minis were down 220 points, or 0.88 percent, S&P 500 e-minis were down 20.25 points, or 0.73 percent, and Nasdaq 100 e-minis were down 60.5 points, or 0.83 percent.
JD.Com's U.S.-listed shares were up nearly 8 percent in premarket after Alphabet's Google invested $550 million in the Chinese e-commerce powerhouse.
Biotechnology firm China Biologic was up nearly 20 percent in premarket after Chinese investment giant CITIC Capital Holdings offered to buy it in a deal valuing the company at $3.65 billion.
General Electric's shares fell 0.30 percent in premarket after it said it will axe 1,200 jobs in Switzerland.
(Reporting by Aparajita Saxena and Ankur Banerjee in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)
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