MARTS TRADE OFF
Trump’s new China tariffs spook Wall Street
The Trump administration tried Tuesday to minimize the intensifying trade war between the US and China — but Wall Street wasn’t listening.
White House trade adviser Peter Navarro called the tariff talk between the two nations a “dispute” — and championed what he called the “courageous and visionary” efforts by President Trump to correct a “massive” trade imbalance between the two countries.
“This is a trade dispute. Nothing more, nothing less,” Navarro told reporters on Tuesday, stressing that the US is looking to protect the “crown jewels” of American technology. Investors saw it differently. The Dow Jones industrial average tumbled 287.26 points, or 1.2 percent, to 24,700.21 — bringing the much-watched index to just below breakeven for 2018.
The S&P 500 and Nasdaq fell 0.4 percent and 0.3 percent, respectively.
Other markets in Asia and Europe had fallen sharply earlier in the day.
Navarro did not play down what Trump has called China’s “unfair practices” toward US technologies.
“If China successfully captures these emerging industries of the future, America will have no economic future while its national security will be severely compromised,” Navarro said.
“These actions are necessary to defend this country, and they are bullish for corporate America,” he said.
Navarro’s remarks came after Trump said Monday that he had directed the United States Trade Representative to create a list of $200 billion in Chinese goods that would be subjected to tariffs of 10 percent — on top of the $50 billion in imports from China that Trump placed tariffs on last week.
“Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship,” Trump said in a statement Monday evening.
Trump’s initial tariffs prompted Beijing to reply with $50 billion in tariffs of its own on US goods.
Trump warned Beijing not to respond to his second round of added tariffs.
The tit-for-tat barbs have manufacturers and consumers alike worrying about higher prices.
Items ranging from automobiles, airplanes, semiconductors and shoes could all see prices rising as US companies discover various parts of their supply chain are affected by the tariffs.
Experts explained that there was still time for the two nations to work things out.
But previous efforts between the US and China to come to an agreement on trade have not been fruitful, Navarro said.
While equity markets worried about trade, the Trump administration’s negotiating tactics had a surprising ally in Goldman Sachs Chief Executive Lloyd Blankfein.
“That’s what you’d do if it was a negotiating position and you wanted to remind your negotiating counterparty of how much firepower you have,” Blankfein said Tuesday in an interview at the Economic Club of New York.
“I don’t think we’re in a suicide pact on this, so I suspect we’re not going to cause the economies to collapse,” Blankfein said.