TARIFF MAN’S BAD DAY
TRUMP’S TRADE WAR TANKS MARKET NEARLY 800 POINTS!
Stocks plummeted yesterday nearly 800 points after the trade deal that President Trump and Chinese officials announced last weekend was thrown into doubt, with a threat of new tariffs.
Trump — dubbing himself “Tariff Man” on Twitter — said he would not balk at imposing tariffs on China if talks break down.
“President Xi and I want this deal to happen, and it probably will,” Trump tweeted. “But if not remember, I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power.”
Over the weekend, White House officials said the U.S. and China had agreed to a deal that would bring the trade dispute between the two economic superpowers to a truce. Sunday, Trump said China would eliminate the 40 percent tariff on cars imported from the U.S., but administration officials walked that back, saying there is not yet a specific agreement. Trump then cast the entire agreement into doubt, saying on Twitter the White House would see “whether or not a REAL deal with China is actually possible. If it is, we will get it done.”
The Dow Jones Industrial Average sank 799 points yesterday, with the S&P 500 index falling 90.31 points, or 3.2 percent, to 2,700.06.
“We don’t know what’s going on, in specific, and so the reaction is volatile,” said Dan La Plante, chief investment officer at Citizens Bank. “It’s euphoria or complete fear.”
Christine Armstrong of Morgan Stanley said trade uncertainty is throwing a wrench into what is other- wise a generally positive economic picture.
“Robust economy, good numbers, everything’s looking good, but tariffs are not good,” Armstrong said. “They’re causing a problem because they’re causing uncertainty.”
Boeing and Caterpillar, two major exporters with much to lose if trade tensions don’t ease, weighed the most on the Dow.
The wave of selling erased the market’s gains from a day earlier, when stocks rallied after the administration said U.S. and China agreed to a temporary truce in their trade dispute. Investors’ confidence in that truce faltered yesterday, contributing to renewed fears that the disagreement between the two economic powerhouses could slow the global economy.
Moody’s Investors Service suggested in a report yesterday that despite the latest U.S.-China talks, both countries remain far from resolving their dispute.
“Narrow agreements and modest concessions in their ongoing trade dispute will not bridge the wide gulf in their respective economic, political and strategic interests,” Moody’s analysts wrote.
The trade dispute has rattled markets in recent months as signs emerged that it has begun affecting corporate profits. That’s stoked traders’ fears that if it drags on much longer it could further weigh on global economic growth.