Stock markets around the world have slumped after US President Donald Trump’s unexpected threat to impose new tariffs on Chinese exports.

In the US the Dow Jones ended 1.8% down while London’s FTSE 100 fell 1.6%.

The US president has vowed to double tariffs on $200bn of Chinese goods, amid claims Beijing is trying to row back on a trade deal.

But Chinese Vice Premier Liu He is still scheduled to visit Washington this week for trade talks.

Yesterday investors sought shelter in safer government bonds and the Japanese yen.