The Dow Jones Industrial Average slid more than 350 points in the minutes following a tweet from President Trump “ordering” U.S. companies to find suppliers out of China.
The decline continued, with the blue-chip average sinking in total nearly 450 points, almost 1.8%, over the next hour.
The broader S&P 500 was off 50 points, or about 1.7%, by early Friday afternoon and the tech-heavy Nasdaq fell 2%.
China announced Friday that it was placing retaliatory tariffs against $75 billion worth of U.S. goods. Trump tweeted an early response on Friday morning, telling U.S. companies to begin moving their supply chains outside of China. Trump said he would make a more official response to Chinese tariffs later.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA,” Trump said. “I will be responding to China’s Tariffs this afternoon.”
….your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States. Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE,….
— Donald J. Trump (@realDonaldTrump) August 23, 2019
The Dow Jones Industrial Average declined almost immediately after Trump’s tweets. The drop comes slightly more than a week after the worst trading day of the year saw the Dow slide 800 points, though stocks had partially rebounded over the last week following strong earnings reports from major retailers.
Beijing will levy a 5% tariff on U.S. goods on Sept. 1, and then increase the tariff to 10% on Dec. 15. The Chinese will also place a 25% tariff on automobiles coupled with a 5% tariff on all auto parts. Experts have predicted a 1-in-3 chance of an economic downturn in the next year as consumers and businesses feel the effects of the trade war.
