The trade disputes that President Trump is waging on multiple fronts dragged U.S. stock markets lower on Monday.
The blue-chip Dow Jones industrial average fell almost 1 percent at the start of New York trading, before paring losses, while the broader S&P 500 slipped 0.3 percent and the tech-heavy Nasdaq dropped 0.7 percent.
Trump announced his latest tariffs — duties of 25 percent on $50 billion of Chinese imports — on Friday, sparking an immediate reaction from Beijing, which pledged to impose levies of its own. China said its tariffs will roll out in two phases: a 25 percent tariff on automobiles, soybeans and other agricultural products starting on July 6, and separate 25 percent tariffs on energy commodities such as crude oil and natural gas.
The charges will ramp up costs for U.S. businesses already dismayed by retaliation from U.S. allies such as Canada, Mexico, and Europe on steel and aluminum tariffs that the White House justified on national security grounds. Trump is considering additional duties on automotive imports using the same argument.
“Add the Canadian, Mexican, and European retaliatory tariffs from the 25 percent steel and 10 percent aluminum tariffs to the $34 billion in retaliatory tariffs from China — agriculture and autos the reported focus — and about $75 billion in U.S. products will get retaliatory tariffs the first week of July,” noted Chris Krueger, an analyst with Cowen Washington Research Group. China has hinted that it might coordinate its retaliation with the other nations.
“That would be fairly remarkable,” Krueger added. “China, Mexico, the European Union, and China working in coordinated concert against the U.S.”
The world’s two largest economies have been quarreling for months over unresolved trade issues, with Trump criticizing China for unfair practices including forced technology transfer, dumping and industrial subsidies, which he says have hurt American workers and America’s most innovative industries.
“From now on, we expect trading relationships to be fair and to be reciprocal,” Trump said in a statement. The president has also expressed concern over China’s “Made in 2025” plan, which lays out 10 industries the country wants to dominate by 2025. Many of Trump’s tariffs align with the industries included in the plan, such as robotics, aerospace and information technology.
