As a lengthy trade battle with China continues to roil this week, Beijing has made a major move that is already adversely impacting the United States.
President Trump has continually poked and prodded at China, specifically on the issue of trade. As a manufacturer of a great many goods, China has excelled at providing the world at large with inexpensive production thanks to their lax attitude toward human rights.
These are the folks who perfected the sweatshop, after all.
This complete lack of regard toward human decency has allowed China to soar to the heights of economic power, and write their own destiny in terms of trade.
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Well…at least until Donald Trump arrived on the scene.
Now the two are duking it out on the world’s stage, and the stock market is suffering as a result.
Stocks fell sharply on Monday, giving back the gains from a strong turnaround in the previous session, after China decided to raise tariffs on some U.S. goods as the ongoing trade war between the world’s largest economies intensifies.
The Dow Jones Industrial Average dropped 704 points, while a 3.8% drop in the tech sector pushed the S&P 500 down by 2.6%. The Nasdaq Compositedropped 3.5%. The S&P 500 and Nasdaq were headed for their worst day of the year. The Dow was on pace to post its biggest one day loss since Jan. 3.
“I think this is a prelude of things to come,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. “We should expect more volatility for the foreseeable future.”
To stem the downturn, “you’d have to see China really come back to the table. The rhetoric we saw this morning tells you that’s not where they’re at,” he said.
China’s move was a fairly powerful one.
China will hike tariffs on $60 billion worth of U.S. imports, starting on June 1. The goods targeted include a broad range of agricultural products. This comes after President Donald Trump raised tariffs on Chinese imports last week. China said in a statement that the U.S.′ decision jeopardized the interests of both countries and does not meet the “general expectations of the international community,” according to a Google translation.
President Trump, who is also considered to be unwilling to “lose” to China, will undoubtedly respond in kind in the coming days.
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