‘FIGHTING’ WORDS
THE DOW took a dive yet again Friday as the tariff fight between the Trump administration and China escalated — with Chinese officials threatening a “fierce counterstrike” if the U.S. follows through on an additional $100 billion in levies.
The market has changed direction again and again this week as investors tried to measure possible consequences for the global economy if the dispute worsens.
A downbeat March jobs report Friday that was far weaker than expected added to the worries — dropping the Dow 572 points, or 2.3%.
The benchmark S&P 500, meanwhile, lost 58 points, or 2.2%, and the Nasdaq slid 161 points, or 2.3%.
The slide came as China’s commerce ministry said Friday that “China has very detailed countermeasures” and will “fight at any cost” to defend its economic interests.
But Trump defended his proposed tariffs a day after Beijing announced plans to tax $50 billion in American products, saying the move might cause “a little pain” but promising that the United States will be better off in the long run.
“I’m not saying there won’t be a little pain, but the market has gone up 40%, 42% so we might lose a little bit of it,” he said in an interview with WABC’s “Bernie & Sid” show Friday. “So we may take a hit, and you know what, ultimately we’re going to be much stronger for it.”
China on Monday announced tariffs on $3 billion in American goods in response to steel and aluminum tariffs Washington imposed last month, sparking fears of a global trade war.
Throughout the week, each side promised to ratchet up the pressure, leading to the deep unease on Wall Street.
Treasury Secretary Steven Mnuchin said Friday that the Trump administration is talking with Chinese officials and is willing to negotiate to resolve the trade dispute. Trump will remain steadfast on protecting U.S. economic interests, Mnuchin added. “We’re absolutely willing to negotiate,” Mnuchin told CNBC. “On the other hand, the President is absolutely prepared to defend our interests.”
Chinese ministry of commerce spokesman Gao Feng said the two sides “cannot possibly” negotiate under the circumstances.
“If the U.S. side announces the list of products for $100 billion in tariffs, the Chinese side has fully prepared and will without hesitation counterattack with great strength,” he said.
Federal Reserve Chairman Jerome Powell said some business executives have begun to express concerns about the impact of a possible trade war. In an appearance before the Economic Club of Chicago, Powellsaid it was discussed at the Fed’s March meeting.