'Dispute may trigger severe market turmoil': Shares tumble as China promises retaliation on Trump's $200bn tariffs threats

White House to identify Chinese goods on which to impose 10% import tariffs

Equity markets across Europe and Asia are in negative territory after the Chinese government vowed retaliation in response to US President Donald Trump's $200bn trade tariffs threat on Chinese goods on Monday, as two of the world's largest economies take a step closer to a full-blown trade war.

In Europe, the FTSE 100 fell 0.5% to 7,593 points while the Euro Stoxx 50 dropped 1.1% to 3,429 points. This follows falls in Asian markets in overnight trading where Hong Kong's Hang Seng declined 2.9% to 29,468 points and the MSCI AC Asia Pacific index fell 0.7% to 172 points. Furthemore, the yen, a typical measure of geopolitical risk, was up 0.6% against the US dollar, 1.3% versus the euro and 1.2% against sterling respectively.  Markets were impacted after Beijing's Ministry of Commerce in Beijing said Trump's plans represented "extreme pressure and blackmail," and it would re...