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Thomas Heath
Journalist and local business columnist, writing about entrepreneurs and businesses in the Washington metropolitan area
US markets plunged on Monday as China announced that it would increase customs duties on $ 60 billion of US goods, thus increasing the stakes of a trade war threatening to jeopardize the US economy. ;Mondial economy.
The Dow Jones industrial average is down more than 500 points, or about 2%, this morning, as investors feared a trade stalemate with China that could escalate into a real economic crisis, dragging the US and global economies into recession.
The Standard & Poor's 500 Index was down 2.0% and the technology-focused Nasdaq Composite had lost more than 2.6%, continuing last week's losses.
"Today, US / Chinese tariffs at the same price have exacerbated the fall of futures contracts, fearing that tensions will provoke a global recession," said Sam Stovall of CFRA Research.
[China retaliates, will raise tariffs on $60 billion in U.S. goods]
The tragedy began last week after President Trump imposed a 25% tariff on Chinese imports worth $ 200 billion in the United States. He also asked his staff to start working on more than $ 300 billion worth of other Chinese products.
Asian markets fell by more than 1%, with the Shanghai Composite losing 1.2% and Japan's Nikkei 225 a little under 1%. European markets were down, with the; The German Dax leads the fall, down 1.5%.
A Saudi newspaper added that two Saudi oil tankers had been attacked with "major damage" in coastal waters near the Persian Gulf, exacerbating tensions with Iran.
Tankers were subjected to a "sabotage act" early Sunday morning off the UAE coast, according to a statement from Saudi Minister of Energy, Industry and Mineral Resources, Khalid Al -Falih, worn by Saudi official press agency.
Saudi Arabia did not say who was responsible for the attack, which did not kill or spill oil, the statement said.
Oil futures were front-page news, with the West Texas Intermediate benchmark up 1.6% and Brent crude nearly 2%.
"Equity investors are in risk mode this morning as Trump's trade war with China seems to intensify as negotiations seem to break," said Ed Yardeni, chairman of Yardeni Research. "Tension is rising in the Middle East as a result of Saudi oil tanker sabotage this weekend."
The Chinese president claimed that the Chinese government was cheating American consumers and businesses by unfairly subsidizing Chinese companies, stealing intellectual property rights from US companies and flooding global markets with cheap products in order to save money. other companies in bankruptcy.
On Monday, he warned China against retaliation on tariffs in a series of tweets published early in the morning. But China has countered with its own tariffs. The Chinese government has announced that it will impose tariffs on US imports as of June 1, with the heaviest penalties for some oxen, live plants, dyed flowers and various fruits and vegetables. The rates ranged from 5 to 25%.
Monday's skid follows the first weekly decline in 2019 of US stocks.
The S & P 500 made a profit on Friday speculating that the escalation would not derail global economic growth, reducing its weekly loss to 2.2%. This is the biggest drop since the five days ended December 21, as stocks fell on the edge of the bear market. The Dow Jones Industrial Average dropped 2.1% to 25,942. Apple Inc. was one of the worst bearers among the 30 members, with the iPhone maker's close ties to China putting its profits at risk. The Nasdaq composite index fell 3%.
[Dow claws out of 359-point hole to end a wild week]
The sale began Monday after Trump's weekend tweets, which threatened to more than double customs duties on $ 200 billion worth of Chinese products, which he then followed. Shares reacted Friday late in the day with a renewed optimism about the possibility of avoiding a total trade war.
Shares of the top 11 industry groups ended lower last week as technology and industrial companies fell the most, with Beijing vowing to retaliate against new US tariffs .
This is a story in development and will be updated.
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