Stocks skid as trade war worsens with tariff threats

NEW YORK» Global stock indexes sank Wednesday after the Trump administration released a list of $200 billion in goods that could be hit with tariffs and China said it would retaliate. The dollar spiked and big exporters plunged.

Companies that sell computer chips, oil, basic materials and heavy machinery dropped after the Trump administration proposed a 10 percent tax on a wide list of imports. It is scheduled to make a decision on the potential tariffs after Aug. 31.

China’s government said it will take “firm and forceful measures” if the new tariffs are enacted. That response would likely include mea- sures other than tariffs. Trump has threatened to put new taxes almost everything the U.S. imports from China.

Jack Ablin, chief investment officer for Cresset Wealth Advisors, said the tariffs can have big effects: a tariff on an import from one country can lead to broad price increases for similar items, and rising taxes and costs might can companies to change their supply lines in less efficient ways.

“When you start adding all of that together, you end up with typically higher inflation and low productivity,” he said. “Higher inflation tends to rob consumers of their income and lower productivity tends to rob companies of their profits.”

A four-day winning streak for the S&P 500 ended as the benchmark in- dex lost 19.82 points, or 0.7 percent, to 2,774.02. The Dow Jones Industrial Average dropped 219.21 points, or 0.9 percent, to 24,700.75. The Nasdaq composite fell 42.59 points, or 0.5 percent, to 7,716.61. The Russell 2000, an index of smaller and more U.S.-focused companies, gave up 11.96 points, or 0.7 percent, to 1,683.66.

The S&P 500 had closed at a fivemonth high Tuesday.

The new list of tariff targets from the U.S. Trade Representative includes vacuum cleaners, furniture and car and bicycle parts, but U.S.-branded smartphones and laptops were excluded. Still, chipmakers, which make large portions of their sales in China, slumped. Nvidia fell 2.3 percent to $247.53 and Micron Technology lost 2.8 percent to $54.18.