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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Europe threatens tariffs on US peanut butter and orange juice as trade war looms - as it happened

European Commissioner for Trade Cecilia Malmström speaking in Brussels today.
European Commissioner for Trade Cecilia Malmström speaking in Brussels today. Photograph: Virginia Mayo/AP

Wall Street close

And finally, the US stock market has closed....after recovering from its lows.

Shares scrambled back after White House press secretary Sarah Sanders said Donald Trump’s plan could include carve-outs for Mexico and Canada.

So the Dow ended down 80 points, the S&P is flat and the Nasdaq gained 0.4% as Facebook and Alphabet rose 2.2% and 1.3%.

Tomorrow Trump may actually release full details of his tariffs. See you then! GW

Full Story: EU: We will retaliate

Here’s our news story on Europe’s move on tariffs:

The European Union has responded to Donald Trump’s threat of a trade war by warning that it will retaliate with tariffs on a range of US imports including peanut butter, cranberries and orange juice.

Reacting to the threat from the US president of 25% tariffs on steel imports and 10% on aluminium, European commissioner for trade Cecilia Malmström said on Wednesday the EU was finalising its own list of American exports that could face sanctions, including steel, industrial and agricultural products.

However, Malmström also said the EU still hoped to avoid a full blown trade war, despite the escalating rhetoric between the US and its main global trading partners in recent days.

“A trade war has no winners and if it does not happen for the better, then we can work with our American friends and other allies on the core issue of this problem, overcapacity,” she told reporters at a press conference in Brussels. “But if it does happen we will have to take measures to protect European jobs.”

More here:

No sign of a recovery on Wall Street yet. The Dow is still down 1%.

Icahn defends share sale

Billionaire investor Carl Icahn has denied acting improperly after selling $31m shares in a company dependent on steel imports.

Icahn, a former special advisor to president Trump, insists that he had no knowledge of the plan to impose tariffs.

In a statement, Icahn Enterprises says:

“We don’t generally comment on rumors, but the recent media speculation regarding our sale of Manitowoc stock calls for a response. We state for the record: Any suggestion that we had prior knowledge of the Trump administration’s announcement of new tariffs on steel imports is categorically untrue.

We reduced our position in Manitowoc for legitimate investment reasons having nothing to do with that announcement.”

Updated

Despite all these trade war worries, the UK stock market has ended the day a little higher.

That’s partly thanks to Rolls-Royce, which jumped after beating profit forecasts and promising more cost savings.

Summary: Trade war fears grow as Europe threatens retaliation

Traders and financial professionals on the floor of the New York Stock Exchange today.
Traders and financial professionals on the floor of the New York Stock Exchange today. Photograph: Drew Angerer/Getty Images

Time for a quick recap, for any readers just tuning in.

Europe has ratcheted up the pressure on Donald Trump over steel tariffs, by drawing up a list of US goods which could be hit with retaliatory action. Peanut butter, orange juice, bourbon and cranberries are all included, along with an unspecified range of industrial and steel products.

Commissioner Cecilia Malmström said Brussels hopes that Trump will not impose blanket tariffs on steel imports into America. But if he does, the EC will take proportionate action.

Malmstrom told reporters in Brussels that:

We cannot see how the European Union, friends and allies in Nato, can be a threat to international security in the US....

It is alarming that the US would invoke this article from 1962, to introduce trade restrictions that will mainly impact traditional allies of the United States.

President Trump, though, is not backing down. He’s tweeted that America has suffered from bad policies and bad leadership for too long.

US Steel has given Trump some good news. It’s re-opening a steel furnace in Illinois and getting hundreds of staff back to work.

A group of countries, including China, have raised concerns about Trump’s planned tariffs to the World Trade Organisation. They fear that tit-for-tat retaliations could break out.

Wilbur Ross, the US commerce secretary, has pledged that America will work constructively with its allies. We won’t ‘blow up the world’, he says (something administrations don’t usually have to spell out).

The US stock market has fallen in early trading. Investors are concerned that the resignation of Gary Cohn as Trump’s top economic advisor raises the risk of a trade war.

White House advisor Peter Navarro has just told Bloomberg TV that he’s not on the list to replace Gary Cohn.

Navarro, a confirmed sceptic on free trade, says there is a “deep bench” at the White House. He also claims that metal tariffs are good for the US economy, and will strengthen national security.

Andre Bakhos, managing director at New Vines Capital of New Jersey, reckons Wall Street is anxious about the prospect of a trade war.

He says (via Reuters):

“It’s more of the same jitters we had seen recently, with investors in this case fearing that a lack of confidence in the tariffs by Trump’s own people.

Investors are taking risk off the table to see how much more damage in the administration this will cause.”

After that early slide the Dow has stabilised, now down 170 points (or 0.7%).

Equipment and machinery giant Caterpillar is the biggest faller, down 1.5%. Demand for its trucks and diggers would fall if the global economy was hit by a trade war.

Aircraft maker Boeing are down 1% -- steel tariffs could push up the cost of making new planes.

Financial stocks are also in the red, with Goldman Sachs down 1.3%.

Wall Street falls as trade war fears grow

DING DING! Wall Street has opened for trading, and the US stock market is taking a leg downwards.

The Dow Jones industrial average shed more than 300 points at the open, a drop of 1.2%.

The S&P and the Nasdaq are also in the red, as investors get their first chance to respond to Gary Cohn’s resignation last night.

Cohn’s resignation is “dominating proceedings early doors”, says Lawrence Mills of Finsa Markets.

The news that Europe is drawing up a list of US goods to target, if Washington doesn’t back down over steel tariffs, is also casting a shadow over the New York stock exchange.

The open of Wall Street

Updated

Donald Trump’s commerce secretary Wilbur Ross has pledged that the US won’t blow the world up in its attempt to tackle trade imbalances.

I guess that’s reassuring.....

CNBC has the details:

Commerce Secretary Wilbur Ross told CNBC on Wednesday that President Donald Trump has indicated a degree of flexibility on tariffs for Canada and Mexico.

“We’re not trying to blow up the world. There’s no intention of that,” Ross said in an interview with CNBC’s “Squawk Box.”

“The president indicated the other day he has a willingness to provide an exemption to Canada and Mexico.”

“We’re not looking for a trade war. We’re going to have very sensible relations with our allies,” Ross added. “We hope and we believe that at the end of the day, there will be a process of working with the other countries that are our friends.”

The jump in America’s trade deficit will add fuel President Donald Trump’s protectionist rhetoric, says Capital Economics.

They add:

Exports fell by 1.3% month-on-month in January, driven by a drop in goods exports, while imports were basically unchanged. In real terms, goods exports fell by 3.3%, compared to a 1.6% decline in real goods imports.

Barring a big rebound in February and March, it therefore looks very likely that net trade will subtract from first quarter GDP growth, albeit by much less than the huge 1.1 percentage point drag seen in the fourth quarter.

US trade deficit hits nine-year high

Just in: America’s trade deficit has swelled to its widest level in almost a decade.

The Commerce Department reports that the trade gap jumped by 5% in January to $56.6bn. That’s more than expected.

The deficit with China has widened particularly sharply -- up 16% year-on-year to $36bn.

US Steel to restart furnace thanks to Trump's tariffs

The Granite City Steel works
The Granite City Steel works Photograph: US Steel

Newsflash: US Steel has announced that it is reopening some operations at its site in Granite City, in Illinois - and giving Donald Trump the credit.

The company will dust off one of two blast furnaces (“B” blast furnace) and the steelmaking facilities at the site, and call back around 500 workers.

CEO David Burritt says he’s responding to the president’s plan to impose 25% tariffs on steel imports:

In a statement that will be welcomed by the White House, Burritt says the US has suffered from steel dumping:

Our Granite City Works facility and employees, as well as the surrounding community, have suffered too long from the unending waves of unfairly traded steel products that have flooded U.S. markets

The Section 232 action announced by President Trump last week recognizes the significant threat steel imports pose to our national and economic security. The President’s strong leadership is needed to begin to level the playing field so companies like ours can compete, win and create jobs that support our employees and the communities in which we operate as well as strengthen our national and economic security.

We will continue to support our customers with the high-quality products they have come to expect from U. S. Steel.”

Burritt has also been speaking on CNBC, saying he sees a “renaissance” in America’s steel industry.

Updated

The US stock market is still on track to fall when trading begins at 9.30am New York time (2.30pm in the UK).

The Dow is being called down 250 points, or around 1%.

Breaking: Some blisteringly hot US jobs figures just landed.

Private sector companies across America created 235,000 new jobs in February, smashing forecasts for 195,000.

That indicates the US labor market remains strong (which is what you want if you’re starting a trade war).

It may also be a sign that Friday’s US jobs report (Non-Farm Payroll) will be better than expected.

Mark Zandi, chief economist at Moody’s, says:

“The job market is red hot and threatens to overheat.

With government spending increases and tax cuts, growth is set to accelerate.”

The threat of new tariffs on US goods being sold into Europe hasn’t forced President Trump to back down.

He’s tweeted a defence of his ‘Make America Great Again’ policy:

Updated

Jars of peanut butter in Berlin.
Jars of peanut butter in Berlin. Photograph: Sean Gallup/Getty Images

Here’s Associated Press’s take on Europe’s threat to impose tariffs on a range of US goods if Donald Trump presses on with steel and aluminium tariffs:

The European Union warned Wednesday that it is ready to retaliate against the U.S. over President Donald Trump’s proposed tariffs on steel and aluminum, with counter-measures against iconic U.S. products like Harley Davidson motorcycles, Levi’s jeans and bourbon.

Trade Commissioner Cecilia Malmström said that the EU, the world’s biggest trading bloc, rejects Trump’s reasoning that the tariffs are backed by international legal right to protect national security. Should tariffs be introduced, the EU and other partners would take the case to the World Trade Organization, she said.

“We cannot see how the European Union, friends and allies in NATO, can be a threat to international security in the U.S.,” Malmström told reporters in Brussels. “From what we understand, the motivation of the U.S. is an economic safeguard measure in disguise, not a national security measure.”

Trump has long railed against what he deems unfair trade practices by China and others, and last week declared that his government would levy penalties of 25% on imported steel and 10% on aluminum imports. The tariffs, he said, would remain for “a long period of time,” but it was not clear if certain trading partners would be exempt.

Malmström said Trump’s motives do not appear compatible with WTO rules and that this means the EU can activate safeguards to protect its own markets.

She confirmed that the EU’s counter-measures would include tariffs on U.S. steel and agricultural products, as well as other products like bourbon, peanut butter, cranberries and orange juice. EU Commission President Jean-Claude Juncker has said that Harley Davidson motorcycles and Levi’s jeans could also be hit.

The list is being circulated among EU member states for approval. The Commission also has plans in case steel from other producers is dumped on European markets.

European Council president Donald Tusk has just weighed in on the issue, saying Donald Trump is wrong over trade wars:

Tusk was speaking as the EU outlined its draft offer to Britain for trade after Brexit. He has ruled out giving the UK a ‘pick and mix’ approach to access to Europe’s markets.

More details in our Politics Live blog:

Newsflash: The World Trade Organisation has just revealed that 18 member states, led by China, have raised concerns over America’s steel and aluminium tariffs:

Reuters has snapped the details:

  • CHINA SPARKS WORLD TRADE ORGANIZATION DEBATE OVER U.S. TARIFFS, 17 OTHER WTO MEMBERS ALSO EXPRESS STRONG CONCERNS - WTO SPOKESMAN
  • WTO MEMBERS SPEAKING OUT OVER U.S. TARIFF PLAN INCLUDED EU, CANADA, TURKEY, RUSSIA, AUSTRALIA, SOUTH KOREA, JAPAN, MEXICO, INDIA AND BRAZIL
  • MANY WTO MEMBERS EXPRESSED BOTH COMMERCIAL AND SYSTEMIC CONCERNS ABOUT U.S. TARIFFS PLAN AND SAID THEY FEARED TIT-FOR-TAT TRADE ACTIONS - WTO SPOKESMAN

EU Commissioner Cecilia Malmstrom, putting US agricultural products like cranberries, orange juice, peanut butter and bourbon in the firing line if a trade war breaks out
EU Commissioner Cecilia Malmstrom today putting US agricultural products like cranberries, orange juice, peanut butter and bourbon in the firing line if a trade war breaks out Photograph: Eric Vidal/Reuters

Q: How quickly could the EC implement these countermeasure against the US?

Cecilia Malmström says that Europe can bring a complaint to the WTO quite quickly.

Implementing rebalancing measures (tariffs on American goods) would take more time, she says, perhaps two months.

But the EC could hold back from counter-measures to see how things develop, as it still hopes that the US government won’t impose blanket tariffs that hurt European companies.

That’s the end of the briefing.

Q: Isn’t there a risk that Europe’s measures could be found illegal, and could annoy allies around the world?

Cecilia Malmstrom says the Commission is taking very serious legal advice, to make sure that any countermeasures it takes against America over steel tariffs are fully legal.

The EC is also talking to major steel producers, as we don’t want them to be hurt, she adds.

Cecilia Malmstrom repeats that the list of US products which could face tariffs in Europe is still provisional.

Changes could be made, and the final list will be made public very soon.

Q: By singling out American peanut butter, orange juice and bourbon, aren’t you escalating the situation rather than trying to turn the volume down?

We are eager not to escalate this, Malmstrom insists, adding:

We do not want this to go out of proportion.

But the EU wants to have “rebalancing” measure ready, in case necessary.

We cannot just stay silent when such a major measure could be taken to the EU economy.

Updated

Q: Might these proposed tariffs on US products break WTO rules, and are member states on side?

Cecilia Malmström says the EC is very confident that its proposed actions are compatible with World Trade Organisation rules, and that there is “very close co-operation with member states” on this issue.

Q: Are you confident that the talk of trade wars coming out of the White House will end after the special election in Pennsylvania, where there are many steel workers?

Your guess is as good as mine, Cecilia Malmström replies. But she notes that Trump did promise to take action on tariffs during his race to the White House.

I hope it will not happen, as a trade war has no winners, she adds. But if it does happen, action must be taken to protect European companies and workers.

EC: We'd slap tariffs on bourbon, peanut butter and OJ

Q: What US products might be hit by the tariffs being drawn up by the EU?

Commissioner Cecilia Malmström says that a provisional list has been drawn up. It is being shared with EU member states now, and will be published soon.

The list includes steel products, industrial products, and agricultural products, she tells reporters in Brussels, adding:

Certain types of bourbon are on the list, as are other items such peanut butter, cranberries, orange juice, etc.

Very soon that list will be public, so you will be able to plan your whisky drinking.

Updated

Onto questions...

Q: What do you think about Donald Trump’s claim that the EU is unfair over trade, and his threat to impose tariffs on EU cars?

Cecilia Malmström insists that there are “only losers” in a trade war, so Europe will respond in a proportionate and balanced way.

Two million cars are produced in the US by EU manufacturers, Malmström says, creating jobs and US exports.

She concedes that the EU has higher tariffs on cars than America, but on the other hand the US has higher tariffs on trucks.

The European Commission has been holding intensive talks with officials in Washington for a very long time, Cecilia Malmström continues, in the hope of getting the US to rethink its tariffs.

Europe still hopes that it will be excluded from the tariffs, she continues.

We have made clear that if a move is taken, it will hurt the European Union and put thousands of jobs at risk - and will be met with a firm response.

EU Commissioners have decided a three-pronged response, she says:

  • The EU will prosecute its rights under the WTO
  • It is preparing safeguards in case steel is dumped in Europe in response to America’s tariffs
  • New measures on US exports into Europe to match the losses suffered by EU exporters

But Europe is still hoping that the US will not impose tariffs, so this retaliatory action can be avoided.

Updated

EC: Tariffs are an attack on America's friends

Over in Brussels, European Commissioner Cecilia Malmström has warned that trans-Atlantic relations could be damaged by the looming tariffs on steel and aluminium.

Malmström is speaking in Brussels now, outlining the European Union’s response to Donald Trump’s plans following a ‘college meeting’ of EU commissioners this morning.

Malmström (who is sporting a natty leather jacket) says “events in the US are moving quickly”.

Malmström explains that Donald Trump may, in the coming days, sign off a decision to impose 25% tariffs on steel and 10% on aluminium imports under the section 232 review of national security.

We have “serious doubt” that this can be justified on national security grounds, she says.

We cannot see how the European Union, friends and allies in Nato, can be a threat to international security in the US.

We find that assumption “deeply unjust” Malmström continues:

It is alarming that the US would invoke this article from 1962, to introduce trade restrictions that will mainly impact traditional allies of the United States.

We also have serious doubts about whether it is compatible with the WTO rules, Malmström continues.

And in a clear warning to the White House, she warns that these tariffs “would be damaging to trans-Atlantic relations...and potentially to a global rules-based trading system.”

Updated

Wall Street heading for losses

It’s almost 6am in New York, so early bird financial workers will be heading to their desks soon (perhaps via the coffee shop and the gym).

And when they get to work, traders are likely to be hitting the sell button as they react to the latest turmoil at the White House.

The Dow Jones industrial average is currently called down 330 points (-1.4%), with losses likely on the S&P 500 and the Nasdaq too.

Uh oh...

Veteran City expert George Magnus isn’t impressed by the frontrunners to become Donald Trump’s new chief economic advisor:

Patrick Chovanec, managing director of Silvercrest Asset Management, suggests a certain sort of candidate will be needed....

City traders are also fretting about Brexit, as well as trade.

The pound has fallen 0.3% to a three-month low against the euro this morning, slipping to €1.116 for the first time since late November. That means one euro is worth 89.6p.

The EU is due to release its draft guidelines for the upcoming trade talks between Brussels and London later today. That will show whether the two sides are converging, following Theresa May’s speech on Brexit last week.

MPs have piled on the pressure, warning that UK trade could ‘fall off a cliff’ unless EU trade agreements with some 70 countries are rolled over soon.

Our Politics Live blog has all the details:

Europe urges Trump to reconsider trigging a trade war

European politicians have been alarmed, and disappointed, to learn of Gary Cohn’s resignation.

German economy minister Brigitte Zypries has warned that the situation over tariffs is serious, adding:

“I hope Trump reconsiders. Trade promotes prosperity if it’s based on exchange, on working together.”

The European Commission is set to review possible countermeasures which it could launch against the US later today, if tariffs on steel and aluminium are imposed. US-made jeans, bourbon and motorbikes are all in the firing line.

European Commission vice president Valdis Dombrovskis has already warned that the EU won’t stand idly by, saying:

“We hope that eventually this initiative from the U.S. side will not be followed through...

But it’s also clear that the EU is going to react if these one-sided tariffs are going to be imposed by the U.S.”

Sold and For Sale signs.

Back in the UK, house price growth has slowed to a five-year low.

The Halifax bank has reported that average house prices increased by 1.8% in the three months to February compared with the same period of 2017.

That’s the weakest annual growth since March 2013, down from 2.2% in January. It will fuel concerns that consumer confidence is weak, with the threat of rising interest rates also deterring borrowers.

Emily Thornberry on Bloomberg

Emily Thornberry, the shadow foreign secretary, says she’s very worried by the threat of a global trade war.

Speaking on Bloomberg TV, she warns that it’s very easy to start these wars, and quite difficult to finish them.

Who might replace Gary Cohn?

When a president drives his top economic advisor to resign, it creates a vacancy.

So there’s plenty of speculation over who might slide into Gary Cohn’s seat and chair the Council of Economic Advisors.

One option is Peter Navarro, a fiercely protectionist voice in the White House who is famously sceptical of free trade. CNBC reports that Navarro had been kept on a tight leash by chief of staff John Kelly - even ordered to cc: Cohn on all his emails.

But now, Navarro seems to have won the battle and could potentially get a promotion. That could alarm the markets...

Conservative economist Larry Kudlow, who served in the Reagan administration, has also been suggested. However, he’s a free trade advocate, so it’s tricky to see how he could back new tariffs.

Kudlow has already tweeted that he asked Cohn to stay on....

President Trump has tweeted that he’ll choose a successor soon:

Pierre Moscovici, the European Commissioner for Economic and Financial Affairs, has tweeted his support for Gary Cohn:

Saxo: Investors should be more nervous

The markets have been choppy this week, as investors have see-sawed over how alarmed they should be about a trade war.

Share fell sharply on Friday when Trump announced his plans for tariffs on steel and aluminium, but did then claw back on Monday and Tuesday. That optimism has now been punctured.

Kay Van-Petersen, global macro strategist at Saxo Bank, says investors can’t risk being blasé:

“I’ve gone from being a little bit relaxed about the trade-war thing to being quite a lot more nervous.

People are not giving it as much weight as they should be…I don’t think people are really thinking this through.”

There’s plenty of red electronic ink on the European markets this morning, following on from the drops in Asia:

European markets in early trading
European markets in early trading Photograph: Thomson Reuters

Investors are worried that Gary Cohn’s departure removes a key opponent to Trump’s protectionist leanings.

Matt Simpson, senior market analyst at Faraday Research, explains:

The revolving door in the Whitehouse gets another spin, but the ramifications from Cohn’s exit has the potential to be huge. As his departure was announced after the US markets closed we’re yet to see a real reaction from the US. But as Cohn was Wall Street’s main man in Washington, we doubt they’ll be so happy about it.

An advocate of free trade and the biggest critic of tariffs, markets fear his absence from the White House could make the tariffs inevitable. Such tariffs didn’t work out well for the Bush administration, so its difficult for markets to fathom a better outcome this time around.

Mining stocks are falling this morning, helping to drag the London stock market into negative territory.

That’s due to fears that a trade war will hurt global growth, and dent demand for copper, zinc, iron ore and coal.

Anglo American have lost 1.8%, with Glencore shedding 1.7% and BHP Billiton down 1.3%.

We’re not looking at a crash, thankfully, but the markets are certainly edgy this morning:

FTSE 100 drops at the open

The City of London skyline.

Britain’s stock market has followed Asia’s lead, downwards.

The FTSE 100 has shed 35 points, or 0.5%, at the open to 7113 -- towards the 14-month low struck on Friday when president Trump announced his tariffs.

Other European markets are also dipping, as news of Gary Cohn’s departure rattles the markets.

Neil Wilson of ETX Capital says the changes of a full-on trade war have increased:

The implication is that without the restraining influence of Cohn on Trump, the president will now have a free hand to press ahead with further tariffs and generally up the ante on trade. Clearly he fought back on trade and lost.

Cohn quits: Financial reaction

Goldman Sach’s CEO Lloyd Blankfein has tweeted his support for his former colleague, saying he’s disappointed that Gary Cohn is leaving the White House.

Rob Carnell of ING fears that investors have been too complacent about the risks of a trade war blowing up:

The breaking news this morning is that Gary Cohn, Director of the National Economic Council, is resigning over the issue.

Trump, for now, seems unbowed. A 25% tariff on EU cars is his response to potential retaliation to the aluminium and steel tariffs by the EU. It won’t end there. It is hard not to characterise current market behaviour as complacent.

Analysts at City firm FXPro warn that Cohn’s departure removes an important voice from the White House:

Markets are in risk-off mode this morning, as news broke just after the US market close yesterday that Presidents Trump’s Chief Economic Advisor, Gary Cohn, resigned after a clash with the president due to the implementation of trade tariffs. Cohn was an advocate of free trade and his resignation will dent market confidence in the administration.

This leaves an imbalance in the administration, with an unopposed cadre of officials supporting trade tariffs, which could lead to a trade war developing as protectionist policies take hold.

Jasper Lawler of CMC Markets says Trump seems to have won the argument over tariffs:

With Cohn’s steadying influence no longer steering economic policy in the Trump administration, in addition to Trump’s recommitment to his nationalist trade agenda, market participants are growing increasingly nervous of where the Trump administration is going.

As a result Dow futures plummet 300 points after the bell.

Updated

The US dollar has hit a two-week low against a basket of currencies this morning, as traders ditch the greenback in favour of the yen.

Updated

A wave of selling swept through Asia-Pacific markets after Gary Cohn’s resignation hit the wires.

Nearly every market is in the red - including Australia (-1%), Hong Kong (0.9%), Tokyo (0.7%) and Shanghai (-0.75%).

Money also poured into the Japanese yen - a traditional safe-haven asset.

Asian stock markets today
Asian stock markets today Photograph: Bloomberg TV

Jingyi Pan, a market strategist at IG in Singapore, says investors are nervously awaiting for more details of Trump’s tariff plans.

“For the markets, Gary Cohn’s departure certainly points strongly to the likelihood that little can halt the President from going ahead with his tariff plans and may mark more volatility to come for markets,” said

“Perhaps the biggest thing to look forward to on this topic will be the details of the plans at the moment, to gain a better gauge of the extent of the impact, whereupon more volatility may be unleashed.”

The agenda: Investors alarmed as Cohn quits

Chief Economic Advisor Gary Cohn.
Chief Economic Advisor Gary Cohn. Photograph: Brendan Smialowski/AFP/Getty Images

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Trade war fears are sweeping through the financial markets today after Gary Cohn became the latest official to quit the White House - over Donald Trump’s plans for new tariffs on steel and aluminium.

Cohn, a former top Goldman Sach’s executive, quit as Trump’s top economic advisor after failing to persuade the president not to impose blanket tariffs on imports into America.

His resignation could dash hopes that Trump might be steered away from protectionist policies -- and raises the chances of a full-blown trade war with retaliatory action from Europe, Canada and China.

As we reported overnight:

Cohn said in a statement issued by the White House that it had been “an honor to serve my country and enact pro-growth economic policies to benefit the American people, in particular the passage of historic tax reform”.

Cohn’s departure represents another blow to the administration, which has suffered several high-profile resignations since the election. Hope Hicks, Trump’s close aide and communications director, quit last week, and other senior figures to have left include Trump’s former chief of staff, Reince Priebus, and former chief strategist, Steve Bannon.

Royal Bank of Canada analysts say Trump could be gearing up for a big fight on trade:

Cohn staunchly opposed the invocation of Section 232 of the Trade Expansion Act to impose steel and aluminum tariffs and his resignation has been taken as a strong indication Trump would go ahead with a set of less measured tariffs, risking a larger trade war.

Adding to those fears, Trump is said to be considering a clampdown on Chinese investment in the US and broader tariffs in retaliation for alleged intellectual property theft.

Asian markets swiftly fell - with Japan’s Nikkei losing 1.6% at one stage (more on that shortly).

Asian stock markets today
Asian stock markets today Photograph: Marketwatch

The futures market is predicting chunky losses on Wall Street later today, with the Dow called down around 350 points (1.4%).

European markets are also tipped to open lower, with the FTSE 100 called down 40-ish points

The agenda:

  • 8.30am GMT: Halifax house price figures for February
  • 10am GMT: Updated eurozone GDP data for Q4 2017
  • 3pm GMT: Bank of Canada’s interest rate decision
  • 3.30pm GMT: US crude oil inventory figures

Updated

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