Markets slide as US-China trade talks begin with Trump call for 'level playing field' - as it happened
All the latest economic and financial news, as a US delegation lands in Beijing for crucial negotiations that could avert a trade war
- Introduction: US delegation is in China for trade talks
- Treasury secretary Mnuchin leads big delegation
- Talks could de-escalate recent tensions.. or not
- President Trump wants a level playing field
- China says it won't be bullied
5.42pm BST
With Wall Street still suffering on concerns about the prospect of a trade war between the US and China, European markets have ended the day lower.
Talks between Chinese and US representatives began in the first of two days of meetings, but both sides have been lowering expectations that there will be a positive outcome. So investors have been shying away from shares, with the final scores in Europe showing:
4.24pm BST
On the market fall, Joshua Mahony at IG says:
Global stocks are on the slide in the wake of a weak US open today, with trade fears and a strengthening dollar weighing on sentiment.
...Continued fears over the pathway of trade negotiations with China are sure to be playing into investor fears, and it is certainly a worry that we are seeing such unconvincing trade in the US despite a largely encouraging earnings season.
3.33pm BST
The latest US monthly jobs figures are out on Friday, and there could be a recovery from the weak (103,000) number seen in March:
We could see a rebound in US nonfarm payrolls to the 200k area in April after a weak March, says @SmithEconomicshttps://t.co/A57bILXlKr
3.29pm BST
Markets continue to suffer on worries about the potential for a trade war between the US and China. Connor Campbell, financial analyst at Spreadex, says:
Despite a lack of news surrounding the ongoing takes between the US and China, the various aggressions reported last night - including news that China has stopped by soybeans from the US, with the latter potentially set to impose restrictions on certain Chinese telecommunication companies selling equipment in America - have reignited fears of a trade war.
It's clear that investors aren't confident about the outcome of the day's delegation get-together. The Dow Jones plunged more than 250 points after the bell, diving below 23700 for the first time in a month. Granted the Dow is also dealing with a fairly hawkish Fed statement from Wednesday night, one that kept up the dollar's hopes of 3 (or even 4) more rate hikes in 2018.
3.09pm BST
#ISM non-manufacturing sector #PMI was 56.8 in April vs consensus forecast of 58.1, 58.8 in March - the dollar is slightly weaker but not by much in reaction to this ^KO pic.twitter.com/oTxQBjBLG6
3.04pm BST
Two surveys of the US service sector have come to different conclusions about the state of this part of the economy.
The ISM non-manufacturing PMI dropped from 58.8 in March to 56.8 in April, below expectations of a level of 58.1. The employment index dropped from 56.6 to 53.6, the lowest since April last year.
US Markit services PMI at a 3m high, new business at its best since March 2015. Input cost prices at 2nd quickest since June 15. Composite read 54.9, pointing at Q2 GDP acceleration vs 2.3% SAAR in Q1.
2.49pm BST
China can withstand a trade war longer than the US, says Wendy Cutler, Asia Society Policy Institute vice president and former acting deputy U.S. trade representative. She was speaking to CNBC:
"Both sides have a lot to lose" in a U.S.-China trade war, according to this expert. https://t.co/FlIH1HC7jj pic.twitter.com/U43OJTMnsl
2.38pm BST
Worries about trade tensions as the US and Chinese delegations meet in the wake of Trump's tariffs have seen US markets open lower.
The Dow Jones Industrial Average is down 170 points or 0.7% while the S&P 500 opened down 0.29% and the Nasdaq Composite off 0.51%.
2.08pm BST
Could Donald Trump's actions on trade and tariffs see a repeat of the 1930s slump? A group of experts certainty think it could happen:
Over a thousand economists have written to Donald Trump warning his "economic protectionism" and tough rhetoric on trade threatens to repeat the mistakes the US made in the 1930s, mistakes that plunged the world into the Great Depression.
The 1,414 economists, including 14 Nobel prize winners, sent the letter on Thursday amid an escalating row over trade between the US and the European Union. Trump has imposed tariffs on steel and aluminium imports but has granted temporary reprieves to the EU, Australia and other countries.
Related: Over 1,000 economists warn Trump his trade views echo mistakes of 1930s
2.01pm BST
With immaculate timing, as the US and Chinese delegations meet, the Commerce Department has released the latest international trade figures.
Overall the trade gap narrowed in March from $57.7bn in the previous month to $48.9bn. This was better than the expected deficit of $50bn, helped by exports increasing to a record high following a surge in deliveries of commercial aircraft and, yes, soybeans.
This should make today's U.S.-China trade talks even more interesting pic.twitter.com/KPbk36EjoU
1.49pm BST
By sending so many senior officials to China, the Trump administration may actually have lowered the chances of a breakthrough.
That's because the delegation don't really agree with each other about trade, making it harder to reach an agreement with Beijing.
One of the key hurdles that will determine success versus non-success at these talks is whether the US team can all stay on message together.
1.02pm BST
Today's trade talks come a month after the US and China both ratcheted up the tensions, by imposing tariffs on $50bn of each other's goods.
12.45pm BST
The EC has predicted that Britain and Italy will share the wooden spoon in the 2018 growth race, while Ireland will power ahead:
Latest 2018 growth forecast by the European Commission:
5.7%
4.5%
4.3%,
4.0%
4.0%
3.8%
3.7%
3.4%
3.0%
2.9%
2.8%
2.6%
2.5%
2.3%
2.3%
2.0%
1.9%
1.8%
1.5%
1.5% #ECForecast
12.33pm BST
Rather awkwardly for our purposes, there appears to be a news blackout on the US-China trade talks!
Bloomberg says:
China's largest news outlets have been ordered to refrain from reporting any material beyond official press releases related to trade talks in Beijing with the U.S., according to people familiar with the matter.
The Communist Party's propaganda department has told news websites to strictly use statements released by the official Xinhua News Agency, without any extra interpretation, according to the people, who asked not to be named as they're not authorized to speak on the matter.
11.38am BST
Chinese foreign ministry spokeswomen Hua Chunying says Beijing hopes to make progress with America - but only if there is mutual respect.
Hua told reporters that:
"The outcome should be mutually beneficial and win-win."
"China will inevitably suffer losses, but China has the political advantage of a centralised and unified leadership and support of a massive domestic market."
10.43am BST
A former trade advisor to president Obama has warned that Trump's delegation probably won't come back from Beijing with a big deal.
Michael Camunez, CEO of consultancy Monarch Global Strategies, says (via CNN):
"I don't expect any grand bargains being struck....There is no clear strategy that can be discerned."
10.20am BST
The European Commission has fired a warning towards the US government not to plunge the world into a trade war.
In its latest economic assessment, just released, the EC warns that there are "increased risks on the horizon".
Europe continues to enjoy robust growth, which has helped drive unemployment to a ten-year low. Investment is rising and public finances are improving, with the deficit in the euro area set to drop to just 0.7% of GDP this year.
The biggest risk to this rosy outlook is protectionism, which must not become the new normal: that would only hurt those of our citizens we most need to protect."
EU Commission thinks #euroboom is still on track - no change to GDP forecasts in its latest forecasts for 2018 and 2019. But warns the Trump monster is coming...https://t.co/JIuaR1anIH pic.twitter.com/captkKDFXK
10.15am BST
Newsflash: inflation across the eurozone has fallen unexpectedly.
The consumer prices index rose by just 1.2% in the year to April, down from 1.3% a month earlier.
A very weak print for euro area core inflation, down to 0.72% YoY in April. Services collapsed to 1.0% post Easter while core goods failed to rebound. The latter is the most worrying news in today's report, potentially reflecting lagged effects of EUR strength. pic.twitter.com/GE06HtGpM9
Euro zone flash inflation slows unexpectedly to 1.2%, core inflation down to just 0.7%.
Hard for the ECB to justify taking its foot off the easing pedal any time soon with figures like these.
9.55am BST
Back in the UK, we have fresh evidence that the economy has lost momentum.
Data firm Markit's monthly measure of service sector activity has risen, to 52.8 in April from March's 51.7. Although that shows faster growth, it's still one of the weakest readings in the last two years.
Muted rebound in UK all-sector #PMI to 53.2 in April, 3rd lowest since Brexit vote and failing to recover the ground lost in March. Signals just 0.2% quarterly #GDP growth at start of Q2. Further knock to #BoE rate hike chances.#GBP pic.twitter.com/KzQSHkedlT
9.47am BST
Global stock markets are subdued as investors watch for developments in Beijing.
The main European indices are almost all in the red, after a cautious session in Asia which saw Hong Kong's Hang Seng shed 1.3%.
The trade talks carry the potential to negatively impact global stocks as a result of reduced risk appetite, and could also result in reduced purchasing momentum for emerging market currencies.
9.15am BST
China appears to have raised the stakes ahead of these trade talks, by stopping buying US soybeans.
The world's biggest oilseed processor just confirmed one of the soybean market's biggest fears: China has essentially stopped buying U.S. supplies amid the brewing trade war.
"Whatever they're buying is non-U.S.," Bunge Ltd. Chief Executive Officer Soren Schroder said in a telephone interview Wednesday. "They're buying beans in Canada, in Brazil, mostly Brazil, but very deliberately not buying anything from the U.S."
9.00am BST
China is "braced for surprises" at today's trade talks, says the Financial Times, especially as Donald Trump has sent seven top officials along.
The FT has also picked up on Beijing's refusal to be forced into concessions:
For senior Chinese officials and their policy advisers, the arrival of what they see as a large and unwieldy US delegation is just the latest twist in three months' of diplomatic exchanges that they have found to be both confusing and insulting. They are also bracing themselves for surprises from Mr Trump, who has previously issued threatening tweets and statements in the midst of delicate Sino-US negotiations.
Last month, after the world's two largest economies threatened to impose punitive tariffs on $50bn worth of each other's exports, Mr Trump said he would consider targeting an additional $100bn worth of Chinese exports to the US. The Chinese then closed ranks, saying they would not negotiate in the face of such threats.
8.37am BST
America is likely to air a series of complaints over China's trade practices today, including allegations of intellectual property theft and unfair state subsidies
A breakthrough deal to fundamentally change China's economic policies is viewed as highly unlikely during the two-day visit, though a package of short-term Chinese measures could delay a U.S. decision to impose tariffs on around $50 billion worth of Chinese exports.
The discussions, led by U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He, are expected to cover a wide range of U.S. complaints about China's trade practices, from allegations of forced technology transfers to state subsidies for technology development.
8.36am BST
Treasury secretary Stephen Mnuchin was in a cheerful mood, telling Reuters he was "Thrilled to be here. Thank you," as he arrived at his hotel in Beijing.
8.35am BST
And we're off....
Talks between China and the US trade delegation have just started, according to the Chinese Foreign Ministry
8.26am BST
Financial markets around the globe will be watching the trade talks in Beijing closely, says Lee Wild, head of equity strategy at interactive investor:
It's trade rather than interest rates or valuations that are troubling markets right now. US officials have flown into Beijing to try and deescalate a trade spat with China, but these talks won't be easy.
This is the issue that markets are super sensitive about currently, and which was responsible in part for the first-quarter crash, so it's unsurprising to see investors take some money off the table."
8.08am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Our great financial team is in China trying to negotiate a level playing field on trade! I look forward to being with President Xi in the not too distant future. We will always have a good (great) relationship!
The China Daily said China will "stand up to the US" if necessary while Global Times says it hopes the two sides can begin resolving trade disputes.
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