Markets continue to downplay the threat of new tariffs on U.S. imports, potentially reading the decision not to nominate Lighthizer, known as a hardline protectionist, as evidence that the threat of tariffs will be used as a negotiating tool rather than as permanent administration policy.

Donald Trump looks set to reignite his tariff war with China when he returns to the White House. But a different and friendlier region will become collateral damage. Europe may well be faced with its own Trump tariffs but it’s those aimed at Beijing that could be more detrimental for the region.

Manufacturing activity fell sharply across Europe last month and a further decline in demand dashed hopes for an imminent turnaround, whereas in China factories extended their recovery, surveys showed.