The blue-chip Dow Jones industrial average and the S&P 500 widened losses Monday after posting the first quarterly declines of Donald Trump’s presidency.
The two widely-followed U.S. indexes fell 1.9 percent and 2.2 percent, respectively, as Trump continued to attack e-commerce giant Amazon, tech stocks grappled with privacy concerns related to the usage of Facebook data in the 2016 campaign and China imposed tariffs on $3 billion of U.S. imports in retaliation for White House duties on steel and aluminum.
“Even a modest rattling of trade sabers can have adverse consequences,” Josh Fineman, chief global economist for Deutsche Asset anagement, said in a note to clients. “And risks of greater escalation cannot be dismissed.”
The tariffs China announced Monday may be followed by more. The world’s second-largest economy has yet to respond to duties Trump outlined in March on Chinese imports including aerospace products, information communication technology, and machinery.
Fears that Trump’s protectionist instincts would prompt him to ignite a trade war have been growing since his decision earlier the same month to impose tariffs of 25 percent on steel imports and 10 percent on aluminum under national security provisions of federal law.
The China duties involve unfair trade practices, a different section of the law, but the White House has wide latitude under both. The president, who often bragged early in his tenure about the stock market’s performance, has brushed off concerns about its reaction to the tariffs.
While Trump’s administration exempted Mexico and Canada from the metals tariffs, pending renegotiation of the North American Free Trade Agreement, the president suggested on Twitter that he may drop the treaty with Mexico if it doesn’t work harder to curtail the flow of illegal immigrants to the U.S.
Mexico is doing very little, if not NOTHING, at stopping people from flowing into Mexico through their Southern Border, and then into the U.S. They laugh at our dumb immigration laws. They must stop the big drug and people flows, or I will stop their cash cow, NAFTA. NEED WALL!
— Donald J. Trump (@realDonaldTrump) April 1, 2018
Before the first quarter, the most recent three-month declines for the Dow Jones and S&P 500 indexes were posted on Sept. 30, 2015, when they dropped 7.6 percent and 7 percent, respectively.
Among Monday’s biggest decliners was Amazon, which plunged 5.6 percent to $1,366 as the president continued to argue on Twitter that the company isn’t paying its share of taxes and is compounding the U.S. Postal Service’s profitability woes.
Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed. Also, our fully tax paying retailers are closing stores all over the country…not a level playing field!
— Donald J. Trump (@realDonaldTrump) April 2, 2018
Facebook, meanwhile, dropped 3.1 percent to $154.88 as investors await a Congressional hearing on how the social media company’s data was obtained by Cambridge Analytica, a British consulting firm employed by the Trump campaign.
