Donald Trump almost single handedly erased Friday morning’s FTSE 100 gains and sent the index sharply lower in afternoon trade.
Trump again threatened the US could impose tariffs on the entire $500 billion worth of imports from China and once again sent investors running for the hills on the prospect of a full blown trade war that could rock the global economy.
Having reached highs of 7706, the FTSE was trading below 7635 at 14:15 in London trade.
In an interview with CNBC’s squawk box, the president said he was ‘ready to go to 500’ if China didn’t fall into line with his demands.
Trump says he’s ready to put tariffs on ALL goods imported into the U.S. from China.
— Jamie McGeever (@ReutersJamie) 20 July 2018
Not stopping with threats on trade, Trump accused the EU and China of manipulating their currencies. The dollar sank sharply on the comments with GBP/USD jumping back above 1.3100 having touched 1.2994 earlier in the day.
China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge. As usual, not a level playing field…
— Donald J. Trump (@realDonaldTrump) 20 July 2018
Friday’s comments ended a brief period of softening in tone on trade and overseas relations which had been accompanied by a gentle move to the upside in the FTSE 100.
The FTSE 100 has a substantial exposure to China through commodity companies such as Anglo American, BHP Billiton and Glencore, all of which were down over 2% on Friday afternoon.