WASHINGTON – New tariffs from China rattled the US stock market Monday. Wall Street saw big losses, stocks sliding more than 470 points when the opening bell rang and heading lower throughout the day.
The Dow Jones Industrial Average was down roughly 600 points much of the day. Markets around the globe also dropped as the trade war between the US and China left investors uncertain.
Last week, the Trump administration raised tariffs from 10 to 25 percent on $200 billion worth of Chinese goods. On Monday, China slapped back, raising tariffs on $60 billion of US goods.
President Trump defended escalating the trade war as good economic policy.
Trump tweeted, “I say openly to President Xi & all my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed & you backed out!”
In a second tweet, the President wrote: “There will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!”
White House Economic Advisor Larry Kudlow explained, “We don’t think the Chinese have come far enough. How long’s it gonna take? I don’t know. Could be a couple of months or thereabouts.”
Kudlow says negotiations are ongoing as his boss calls for higher tariffs on about $300 billion more in Chinese imports.
Trump is targeting China’s unfair trade practices and wants them to stop stealing American intellectual property and technology.
President Trump and China’s President Xi will meet at the G-20 summit in Japan next month. In the meantime, it appears both sides are far from a deal.
So how will Americans feel the brunt of the new tariffs? We could see increased prices on items like TVs, cars, batteries, beauty products and coffee. Odds are that importers won’t absorb the entire cost but push it onto consumers. Plus, there could be more retaliation from China – last time farmers took a big hit.