By Anna Isaac
Global stocks fell Tuesday after President Trump signaled that he may wait another year to strike a deal with China, prompting concerns that a long-awaited end to the trade war may be further delayed.
Futures linked to the Dow Jones Industrial Average declined 0.6%, reversing gains posted earlier in the day. The pan-continental Stoxx Europe 600 gauge wavered between gains and losses before slipping down 0.1%.
Mr. Trump said he has "no deadline" for reaching a trade accord with China.
"In some ways, I like the idea of waiting until after the election for the China deal," the president said, following a meeting with the North Atlantic Treaty Organization Secretary-General Jens Stoltenberg on Tuesday in London. The U.S. presidential elections are scheduled for Nov. 3.
The dispute between the world's two biggest economies, which has curtailed global trade as both sides imposed tariffs and threatened new levies, has weighed on the outlook for economic growth around the world. An agreement with China is dependent on whether he wants to make one, Mr. Trump said.
"It's extremely difficult to base any investment thesis around trade, given how challenging the protagonists are," said Colin Reedie, co-head of global fixed income at Legal & General Investment Management. "It's been a fairly bullish risk environment, and markets are squeezing higher toward the end of the year, so they are a little bit more vulnerable to bad news."
The U.S. on Monday moved toward opening multiple new fronts in Mr. Trump's global trade war.
The White House proposed tariffs against $2.4 billion of French imports in response to the European nation's new digital-services tax, which it said unfairly targets U.S. tech companies such as Apple and Alphabet's Google. France's Finance Minister Bruno Le Maire said the European Union "would be ready to retaliate" if the U.S. pressed ahead and imposed tariffs.
"Tariffs will be a part of statecraft from now on," said Geoffrey Yu, head of the U.K. investment office at the wealth-management arm of UBS Group. "There are no allies when it comes to tariffs right now."
The threat to impose levies on French products came within hours of Mr. Trump saying he would revive tariffs on steel and aluminum imports from Brazil and Argentina, a move that caught investors off-guard on Monday and weighed on U.S. stocks.
Yields on U.S. and European government bonds dropped as investors shifted funds into haven assets. The rate on the 10-year Treasurys fell to 1.795%, from 1.835% Monday.
"The move lower in bond yields is utterly in response to the rhetoric of Trump himself," said Mr. Reedie.
Earlier in the day, trading across Asia was mixed. The Shanghai Composite Index ended the day up 0.3% while Japan's Nikkei 225 gauge fell 0.6% before Mr. Trump made his comments on the China deal.
Brent crude, the global benchmark for oil prices, gave up earlier gains and traded almost flat at $60.85 a barrel.
Later in the day, software maker Salesforce.com will report earnings after markets close in the U.S.
Write to Anna Isaac at firstname.lastname@example.org