NEW YORK, July 12 — European and US stock markets retreated yesterday as US President Donald Trump ramped up his trade offensive, threatening a 35-percent levy on Canada.

Trump dampened earlier optimism by firing off more than 20 letters to governments outlining new tariffs if agreements are not reached by August 1.

Bitcoin meanwhile pushed on with its climb, reaching an all-time high above US$118,000.

The dollar was higher against its main rivals, and oil prices gained.

Wall Street’s three main indices fell, with both the S&P 500 and Nasdaq retreating from records.

But the pullback was relatively modest, implying that many investors are taking a wait-and-see approach to Trump’s latest tariff broadsides.

“We have yet to see new substantial tariffs actually be enforced,” said Adam Sarhan of 50 Park Investments, describing investors as sceptical the biggest levies will actually be enacted.

A note from Oxford Economics characterized Trump’s moves as “more tariff theatrics,” while allowing that the levy on Canada produced “jitters.”

In Europe, where investors were awaiting news of Trump’s new tariff level targeting the European Union, the Paris stock market dropped 0.9 percent and Frankfurt 0.8 percent.

“The fallout hasn’t been more pronounced because the market still continues to view all of this as a point of negotiating leverage,” said analyst Patrick O’Hare of Briefing.com.

Trump dialled up his trade war rhetoric Thursday, warning that Canada faced a 35-percent tax, while other countries would be handed blanket tariffs of up to 20 percent, from the current 10 percent.

That came after he outlined plans to impose 50-percent tariffs on copper imports, while threatening 200-percent levies on pharmaceuticals, and hit Brazil with a new 50-percent charge.

The moves are the latest by the White House in a campaign it says is aimed at ending decades of the United States being “ripped off”.

Trump’s initial bombshell tariffs announcement in April sent markets into turmoil until he paused them for three months, and the latest measures have had less impact.

London’s FTSE 100 and the pound retreated after data showed the UK economy unexpectedly shrank in May — its second consecutive monthly decline.

That followed a mixed session in Asia, where Hong Kong rose, Tokyo fell and Shanghai flattened by the close.

Shares in BP jumped 3.4 percent in London after the energy giant said it expected to report higher oil and gas production for its second quarter.

Levi Strauss & Co. shot up 11.3 percent after reporting higher profits on a 6.4 percent rise in revenues. The denim company scored especially solid growth in the Americas and Europe. — AFP