Global stocks drop on fears of expanding trade war

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European shares sink to a more than three-month low, with carmakers taking the hardest hit, as Trump stokes trade tensions

NEW YORK - Global equities tumbled and safe-haven sovereign bonds surged Friday after President Donald Trump’s unexpected threat of tariffs on Mexican goods added to fears that escalating trade wars will push the U.S. and other major economies into recession.

Washington says it will impose a 5% tariff beginning June 10, which would then rise steadily to 25% until illegal immigration across the southern border is stopped. Trump tweeted the decision late Thursday, catching markets by surprise. “It is a nasty slowdown, it looks likely to be taking longer than we thought. Many thought that the slow down would be in Q1 and the recovery in Q2, but clearly everything that we see in May is telling us this will be pushed back into Q3 or Q4,” Milligan added.On Wall Street, the Dow Jones Industrial Average fell 264.12 points, or 1.05%, to 24,905.76, the S&P 500 lost 27.46 points, or 0.98%, to 2,761.4 and the Nasdaq Composite dropped 76.86 points, or 1.02%, to 7,490.86.

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