Trump orders list of tariffs against China

Dow tumbles 700 points as trade tensions grow

WASHINGTON – President Donald Trump ordered trade officials

Thursday to draw up a list of tariffs on Chinese products, despite warnings from American business groups that the move would lead to higher prices for consumers.

Trump said the yet-to-specified tariffs are designed to address unfair Chinese trade practices — “China’s economic aggression,” a White House statement said. The Chinese vowed retaliatory taxes on

American imports.

“We’re doing things for this country that should’ve been done for many, many years,” Trump said.

Worried investors drove the Dow Jones Industrial Average down more than 700 points Thursday over concerns that trade tensions would hurt U.S. companies and harm the world economy.

On Thursday they fled stocks and bought bonds, which sent bond prices higher and yields lower. With interest rates falling, banks took some of the worst losses. Technology and industrial companies, basic materials makers and health care companies also fell sharply.

Peter Donisanu, an investment strategy analyst for the Wells Fargo Investment Institute, said the risk of a damaging trade war is still low because the Trump administration is targeting specific goods that aren’t central to China’s economy. That could change if it puts tariffs on products like electronics or appliances imported from China.

“If the Trump administration really wanted to hurt China and start a trade war, then they would go after those larger sectors,” he said. Still, Donisanu said that after last year’s rally, investors are looking for new reasons to feel optimistic about stocks. With trade tensions in focus over the last month, they’ve had trouble finding any.

The S&P 500 index skidded 68.24 points, or 2.5 percent, to 2,643.69. The Dow Jones industrial average sank 724.42 points, or 2.9 percent, to 23,957.89. The Nasdaq composite gave up 178.61 points, or 2.4 percent, to 7,166.68. The Russell 2000 index of smaller-company stocks lost 35.43 points, or 2.2 percent, to 1,543.87.

The administration announced the filing of formal complaints with the World Trade Organization, though Trump said the WTO has been “a disaster” for U.S. trade and often acted unfairly to Americans.

Under a memorandum signed at the White House, Trump ordered the U.S. trade representative to develop a list of specific tariffs within 15 days; they would be subject to a period of public comment before they took effect.

Trump announced the results of a trade representative’s investigation on Chinese practices, including claims of cybertheft of American trade secrets.

The United States aims for tariffs on $50 billion to $60 billion of Chinese imports, seeking to match the amount it says U.S. companies lost because of Chinese trade practices.

U.S. businesses are likely to comment against tariffs, having asked Trump not to take such a step.

Some business leaders said they agree Chinese trade practices need to be reined in, but tariffs would invite Chinese countermeasures on American products, leading to higher prices on consumer goods.

“The only way we’ll truly make lasting progress is through a strategic approach that uses both carrots and sticks to accelerate changes to Chinese policies,” said Jay Timmons, president and CEO of the National Association of Manufacturers. That includes “efforts to forge a fair, binding and enforceable trade agreement with China that requires them to end these practices once and for all,” Timmons said.