LONDON - Global equities mostly retreated Tuesday after US President Donald Trump warned there was no deadline for doing a trade deal with China.
Trade uncertainty also returned to the fore as the United States reimposed tariffs on Argentina and Brazil, threatened steep levies against France -- and warned China of possible new measures if ongoing talks fall through.
Trump, in Britain for a NATO summit to be held in Watford north of London, warned that efforts to resolve a trade dispute could wait until after next November's US election.
"I have no deadline," Trump told reporters upon his arrival.
"In some ways I like the idea of waiting until after the election for the China deal."
Trump's trade war with China and on-again off-again attempts to reach a deal have destabilized markets and stoked geopolitical tensions.
"Equity markets in Europe and US futures were hit as Donald Trump upped the ante again on trade," noted Markets.com analyst Neil Wilson.
"The chances of a (China) deal by December 15 just took another turn lower.
"After weeks of making generally positive noises on a deal being very close, there is a real sense now that a deal is not so very near at all and markets need to reprice," Wilson added.
As late as last week Trump boasted he was in the "final throes" of negotiating "one of the most important deals in trade ever".
But Washington has since courted Chinese anger by expressing support for Hong Kong protesters, calling progress into doubt.
Optimism that Beijing and Washington will eventually hammer out a partial agreement as part of a wider deal has supported equities for weeks, helping Wall Street to set numerous records.
But investor sentiment was dealt a blow on Monday when Donald Trump said he would reinstate steel and aluminum tariffs on the two South American countries, which he accused of manipulating their currencies and hurting US farmers.
Later, officials warned they would also hit France with up to 100 percent levies on $2.4 billion in goods, saying a French digital tax was discriminatory against US tech firms such as Google, Apple and Amazon.
Sparkling wine, yogurt and Roquefort cheese could be affected as soon as next month, while US Trade Representative Robert Lighthizer warned his office was also considering similar moves against Austria, Italy, and Turkey.
On Tuesday, France vowed a "strong" response to any tariffs.
Uncertainty over trade, combined with a disappointing US manufacturing report, sent all three main indices on Wall Street tumbling Monday.
On Tuesday, London equities slid also as mining companies retreated on worries over demand from Asian powerhouse China, which is a top consumer of many commodities.
Britain's banks also dropped after Moody's ratings agency changed the banking system's overall outlook from stable to negative, citing weak economic growth and "prolonged uncertainty" surrounding Brexit.
In commodities, oil prices extended gains ahead of a key meeting of OPEC and other major producers, which is expected to see them maintain output cuts into June, with speculation they could go on until the end of 2020.