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Trump says China-US trade deal could wait until after 2020 election

Phillip Inman
Photograph: Evan Vucci/AP

Donald Trump has warned that a trade deal with China could be more than a year away in comments that sent shares in Britain’s top 100 companies and US stock markets tumbling.

Speaking at the Nato summit in London, the US president said the US was doing “very well” from the trade war and he was in no hurry to sign an agreement before he runs for re-election next November.

“In some ways it’s better to wait until after the election for the China deal. But they want to make a deal now,” he said.

The FTSE 100 dropped 1.75%, or more than 100 points, and US stock markets were also sharply lower, the Dow Jones ended down over 1%, as traders digested the president’s view that the uncertainty surrounding the US-China trade talks – which have been blamed for cutting global trade growth by as much as three-quarters since 2017 – could drag on into 2021.

Trump accused China of “ripping off the US for many, many years”, and said it was desperate to end the trade war, which he claimed was hurting Beijing much more than Washington.

In recent weeks the White House has sent mixed signals about progress towards a comprehensive trade deal between the US and China. Last month, Chinese officials said they were on course to sign a first-stage deal with the US, and Washington’s silence was read as tacit approval. But only days later Washington made it clear that the two sides were still at odds and a deal depended on further concessions from Beijing.

Trump’s comments came only hours after he proposed import tariffs on French goods of more than £1.8bn in retaliation for a new tax imposed by Paris on the sales of digital services providers.

The US president said France had been wrong to hit American tech firms with a 3% levy on their global revenues.

Trump denied he was “in love” with Facebook, Google and Twitter. But he said they were “our companies, American companies”, and he would defend them from punitive taxes.

“I’m not going to let anyone take advantage of American companies. If anyone is going to take advantage of American companies, it’s going to be us,” he said.

“I don’t want France to be taxing American companies. If anyone’s going to tax American companies, it’s us. So we’re putting a tax on their [France’s] wines and everything else.”

Trump also criticised the French president, Emmanuel Macron, saying that sometimes he did things that were “counterproductive to his country”.

More than 60 French products, covering food, drink, fashion, cosmetics and accessories, could incur a 100% tariff.

The list also includes “sparkling wine, made from grapes”, which appears to cover France’s champagne production as well as crémant wines from other regions.

Lipstick, eye makeup and various soaps also appeared on the list of products that the credit ratings agency S&P said were worth £1.83bn in the 12 months to 30 September.

“That was equivalent to 4.1% of total imports from France over the same period. The largest import lines were: beauty products worth $842m and dairy products worth $202m,” S&P said.

The list also targets handbags and cast-iron table and kitchen products, which is likely to cover Le Creuset and similar products.

The US trade negotiator Robert Lighthizer said the government was exploring whether to open similar investigations into the digital services taxes of Austria, Italy and Turkey.

“[We are] focused on countering the growing protectionism of EU member states, which unfairly targets US companies,” Lighthizer said. His statement made no mention of proposed digital taxes in Canada or Britain.