Stocks took a big hit on Thursday afternoon after U.S. President Donald Trump said he will be implementing a new 10% tariff on the remaining $300 billion in Chinese goods not already included in existing U.S. tariffs.
In a series of tweets, Trump said U.S. representatives are having constructive trade talks with China but once again blamed China for backing out of a potential deal three months ago.
“More recently, China agreed to...buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die!” Trump wrote.
Trump said the new tariffs will be implemented as negotiations continue, and he is optimistic a deal will be reached.
“We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!” he said.
The Federal Reserve cited “global developments” as one of the primary reasons for its interest rate cut on Wednesday. The prospect of new tariffs and potential retaliation from China certainly seems to have spooked investors.
Within minutes of Trump’s tweets, the Dow Jones Industrial Average plummeted from a 300-point gain to a 100-point loss. The SPDR S&P 500 ETF Trust SPY also dipped into negative territory on the day.
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