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US markets end lower as US govt threatens tariffs on $11 billion of EU goods

The US Markets ended in red, with losses of over half a percent, on Tuesday on fears over escalation of trade tensions with the European Union and a weaker global outlook from the International Monetary Fund (IMF). The office of the US Trade Representative threatened to levy tariffs on many European goods late Monday. The threat is a retaliation against European companies' subsidies for aircraft manufacturer if the US follows through, the proposed tariffs would affect about $11 billion in imports to the US, including helicopters, bicycles, cheese and wine. The US-EU tensions comes with the administration reportedly close to resolving a yearlong spat with China, which has roiled markets amid fears the clash between the world's largest economies could disrupt global economic growth.

Meanwhile, the IMF has slashed the global growth forecast for this year, citing the trade tensions, weaker business confidence, tighter financial conditions and higher policy uncertainty. The Washington-based global lender cut the growth forecast for this year to 3.3% in its latest World Economic Outlook, or WEO, which is released twice a year. In a January update to the WEO, the IMF had predicted 3.5%, which was lower than 3.7% seen in the October report. The growth momentum is expected to gain steam in the second half of this year. Growth for 2020 was projected at 3.6%, which was unchanged from the January prediction. Growth in the emerging market and developing economies is projected to rise to 4.8% next year from 4.4% this year.

Dow Jones Industrial Average dropped 190.44 points or 0.72 percent to 26150.58, Nasdaq declined 44.61 points or 0.56 percent to 7909.28 and S&P 500 was down by 17.57 points or 0.61 percent to 2878.20.

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