China then retaliated with tariffs of its own on $60bn US goods.
Tensions between the two super-powers increased after Vice-Premier Liu He — China’s top economic advisor — had his planned visit to Washington cancelled.
The costly trade dispute has dented the European stock markets with Europe’s STOXX 600 falling by 0.1 per cent.
STOXX 600 is an indicator of European market performance.
The index tracks the return of the 600 largest stock exchange listed companies from 18 European countries, including the UK, Germany and France.
Leading Eurozone stocks index fell 0.3 per cent, breaking the longest winning streak since 1997.
The biggest impact fell the cars and mining sectors, stocks were down by almost a percentage point.
Market uncertainty is expected to continue for a “relatively protracted period” as a deal appears to be a long way off between the two nations.
There’s potential for this to be a relatively protracted period of uncertainty given that it seems unlikely you’re going to come to a quick conclusion where both sides are happy.
Mike Bell, global market strategist at JP Morgan Asset Management
Mike Bell, global market strategist at JP Morgan Asset Management, said: “There’s potential for this to be a relatively protracted period of uncertainty given that it seems unlikely you’re going to come to a quick conclusion where both sides are happy.”
This morning British travel operator Thomas Cook announced its shares have plunged 23 percent.
The travel giant has forecast earnings of £280m by the end of the year, falling considerably below the £323m they predicted earlier in July.
Thomas cook blamed the hot summer weather rather than the on-going trade dispute.
Peter Fankhauser, Chief Executive of Thomas Cook, said: «Summer 2018 has seen a return to popularity of destinations such as Turkey and Tunisia.
“However, it has also been marked by a prolonged period of hot weather across Europe.
“This meant many customers spent June and July enjoying the sunshine at home and put off booking their holidays abroad, leading to even tougher competition and higher than usual levels of discounting in the ‘lates’ market of August and September.”
Meanwhile shares in Sky Europe’s biggest pay-TV group rocketed up 9 per cent following a bid of $40 billion from US TV giant Comcast.
Sky shares jumped to 17.23 pounds just below Comcast’s cash offer of 17.28 pounds a share.
Elsewhere Randgold Resources topped the STOXX with a 4.4 per cent gain after it agreed a share-for-share merger with Canada’s Barrick Gold in a deal worth $18.3 billion.