Specialist James Denaro, right, works at his post on the floor of the New York Stock Exchange. (AP Photo/Richard Drew) File photo
NEW YORK, United States — Stock markets in the United States and Europe retreated Friday as US President Donald Trump ramped up his trade offensive. Trump threatened a 35-percent levy on Canada.
Trump dampened earlier optimism by firing off more than 20 letters to governments. These outlined new tariffs if agreements are not reached by Aug. 1.
Bitcoin meanwhile pushed on with its climb, reaching an all-time high above $118,000.
The dollar was higher against its main rivals, and oil prices gained.
READ: Philippines airs concern as Trump hikes tariff to 20%
Wall Street’s three main indices fell, with both the S&P 500 and Nasdaq retreating from records.
But the pullback was relatively modest. This implied that many investors are taking a wait-and-see approach to Trump’s latest tariff broadsides.
“We have yet to see new substantial tariffs actually be enforced,” said Adam Sarhan of 50 Park Investments. He was describing investors as skeptical that the biggest levies will actually be enacted.
A note from Oxford Economics characterized Trump’s moves as “more tariff theatrics.” Meanwhile, it recognized that the levy on Canada produced “jitters.”
In Europe, investors were awaiting news of Trump’s new tariff level targeting the European Union. The Paris stock market dropped 0.9 percent and Frankfurt 0.8 percent.
Markets see Trump still negotiating
“The fallout hasn’t been more pronounced because the market still continues to view all of this as a point of negotiating leverage,” said analyst Patrick O’Hare of Briefing.com.
Trump dialed up his trade war rhetoric Thursday, warning that Canada faced a 35-percent tax. Meanwhile, other countries would be handed blanket tariffs of up to 20 percent, from the current 10 percent.
That came after he outlined plans to impose 50-percent tariffs on copper imports. He threatened 200-percent levies on pharmaceuticals and hit Brazil with a new 50-percent charge.
READ: Trump threatens Canada with 35 percent tariff rate starting Aug 1
The moves are the latest by the White House in a campaign it says is aimed at ending decades of the United States being “ripped off”.
Trump’s initial bombshell tariffs announcement in April sent markets into turmoil until he paused them for three months. The latest measures have had less impact.
London’s FTSE 100 and the pound retreated after data showed the UK economy unexpectedly shrank in May. This was its second consecutive monthly decline.
That followed a mixed session in Asia, where Hong Kong rose, Tokyo fell and Shanghai flattened by the close.
Shares in BP jumped 3.4 percent in London after the energy giant said it expected to report higher oil and gas production for its second quarter.
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Levi Strauss & Co. shot up 11.3 percent after reporting higher profits on a 6.4 percent rise in revenues. The denim company scored especially solid growth in the Americas and Europe.