© Reuters. People pass a stock board showing stocks in red outside the Singapore Exchange in the central business district in Singapore

By Tom Westbrook

SINGAPORE (Reuters) – Asian shares extended their losses on Wednesday after U.S. President Donald Trump said a trade deal with China might have to wait until after the 2020 presidential election, dashing hopes for a quick preliminary agreement.

Fresh U.S. tariffs on Argentina and Brazil as well as threatened duties on French goods also darkened the mood, as a trade war that appeared to be winding down a week ago now looks like ramping up.

Investors turned to safe-havens, boosting bond prices and sending gold to a one-month high, while MSCI’s broadest index of Asia-Pacific shares outside Japan () fell 0.9%.

Japan’s Nikkei () dropped 1.2%, matched by falls in Hong Kong () and Korea (), where stock markets hit their lowest since October.

Shanghai blue chips () fell 0.2% and Australia’s S&P/ASX200 () tumbled 1.7%, having shed almost 4% since closing on Monday.

The yield on benchmark U.S. 10-year () treasuries fell as low as 1.6930% overnight, the sharpest fall since May. It stood at 1.7242% on Wednesday.

“Suddenly you can feel the market,” said Sean Taylor, chief investment officer for Asia-Pacific at German asset management firm DWS, calling trade the top threat to the global outlook.

“It just takes one or two comments and then a bad feeling again,” he said. “It’s still quite uncertain.”

Trump had told reporters in London that there is “no deadline” for an agreement with China to end the tit-for-tat tariff war, which the International Monetary Fund has said will push global growth to its slowest in a decade.

“In some ways, I like the idea of waiting until after the election for the China deal,” he said.

U.S. Commerce Secretary Wilbur Ross said if no substantial progress was made soon, another round of duties on Chinese imports including cell phones, laptops and toys would take effect on Dec. 15.

No high-level meetings are scheduled and the parties still needed to sort out details about Chinese purchases of U.S. farm products and an enforcement mechanism, he told Reuters.


That put the brakes on a rally that had lifted the S&P 500 almost 10% since early October, when top diplomats from China and the United States met and outlined an initial agreement that Trump said he hoped could be sealed within weeks.

The Dow Jones Industrial Average () fell by a percentage point overnight, while the Nasdaq () half a percentage point and the S&P 500 () 0.66%.

“As if we needed a reminder, the market remains incredibly sensitive to trade developments,” said RBC Capital Markets’ Chief US Economist, Tom Porcelli. “The lack of urgency to cut a deal was presented today as very real.”

In currency markets China’s yuan took a beating and there was a flight to the safe-haven Japanese yen and to the Swiss franc, which held just under a one-month high on Wednesday.

However the trade-exposed New Zealand dollar mostly held on to gains won against the greenback after disappointing manufacturing data weakened the U.S. currency on Monday.

“It might be that apart from the global risky stuff, the market is thinking about the U.S. economy maybe slowing,” said Westpac FX analyst Imre Speizer.

“They’re pricing a little bit more in for Fed cuts.”

The dollar last traded for 108.65 yen , while a euro bought $1.1081 (). The slipped 0.2% to $0.6833 after data showed Australia’s September-quarter growth missed forecasts.

Gold held its poise at $1,477.29 per ounce.

Oil steadied after slipping overnight.

Brent crude () futures rose 0.44% to $61.09 a barrel while U.S. West Texas Intermediate (WTI) crude () gained 0.45% to $56.35 per barrel.

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