The prospect of an all-out trade war between America and China became real.
Donald Trump said he would impose tariffs on $50bn of Chinese goods, because Beijing was not dealing with American complaints about stealing intellectual property.
China responded in kind by announcing penalties on $50bn of American goods, which prompted Mr Trump to threaten to levy additional tariffs on goods worth $400bn.
Global stockmarkets took fright at the trade news, none more so than in China. The Shanghai Composite fell by 4% in a day to its lowest level in 20 months. The Shenzhen Composite dropped by 6%. Yi Gang, the governor of the People’s Bank of China, said investors should “stay calm and rational”. The central bank pumped 200bn yuan ($31bn) into financial institutions, followed by a smaller intervention, to ensure they remain liquid.
Oil prices swung up and down in part because of China’s plan to target tariffs at American energy supplies.
Investors were also jittery ahead of an OPEC meeting on June 22nd to discuss whether to increase oil production after an 18-month freeze in output.