The world's two largest economies have raised tariffs on hundreds of billions of dollars of each other's goods in their dispute over U.S. complaints about Chinese technology ambitions. The tariffs war has rattled investors, especially in Asia, where the Shanghai Composite index declined 1.1% to 2,893.76.
In Europe, Germany's DAX opened higher following a report that industrial production rose 0.5% in March from the month before, but it shed those gains to trade flat by midday, at 12,091. The CAC 40 in France fell almost 0.3% to 5,382, while Britain's FTSE 100 dropped 0.3% to 7,240.
U.S. futures also declined, with the contract for the Dow Jones Industrial Average down 0.5% to 25,843. The S&P 500 future contract lost 0.6% to 2,874. Washington has accused Beijing of reneging on its commitments and is preparing to raise import taxes on $200 billion of Chinese goods to 25% from 10% on Friday, and to impose tariffs on another $325 billion in imports, covering everything the country ships annually to the United States.
Trade talks are scheduled to resume Thursday in Washington. Adding to the gloom, China reported Wednesday that its exports sank 2.7% in April from a year earlier, a reversal from March's 14.2% growth and well below private sector forecasts of growth in the low single digits.
Imports rose 4%, rebounding from the previous month's 7.6% decline. Imports of American goods fell 26% from a year earlier to $10.3 billion. Exports to the United States, China's biggest foreign market, were down 13% at $31.4 billion.
The latest flare-up in trade tensions will likely cool if talks continue as expected, Tianjie He of Oxford Economics said in a commentary. But, he added, "the probability of renewed escalation of the U.S.-China trade war has now risen substantially — which would be a drag on both the economies, especially China."
Elsewhere in Asia, Japan's Nikkei 225 index dropped 1.5% to 21,602.59. Hong Kong's Hang Seng gave up 1.3% to 28,976.38; the Kospi in South Korea shed 0.4% to 2,168.01 and Australia's S&P ASX 200 slipped 0.4% to 6,269.10. Shares also fell in Taiwan, India and Southeast Asia.
RIDE APP STRIKE: Many drivers for ride-hailing giants Uber and Lyft are turning off their apps to protest what they say are declining wages at a time when investors are flooding the companies with billions of dollars. Demonstrations are planned in 10 U.S. cities Wednesday, including Chicago, Los Angeles, New York, San Francisco and Washington, as well as some in Europe. The protests come in advance of Uber's initial public stock offering on Friday. Uber aims to raise $9 billion from investors and is expected to be valued at up to $91.5 billion. Lyft shares are down about 18% from their $72 IPO in April, closing at $59.34 Tuesday.
ENERGY: Benchmark U.S. crude lost 13 cents to $61.27 per barrel in electronic trading on the New York Mercantile Exchange. It fell 1.4% to settle at $61.40 per barrel on Tuesday. Brent crude, the international standard, lost 23 cents to $69.65 per barrel. It declined 1.9% to close at $69.88 per barrel overnight.
CURRENCY: The dollar fell to 110.06 Japanese yen from 110.26 yen. The euro rose to $1.1202 from $1.1192.
Ott reported from Madrid.