Dow drops 300 points after Trump tariffs rise, China threatens to retaliate

May 10, 2019, 15:24 UTC

By Lucy Bayly

The Dow Jones industrial average fell 300 points on Friday morning after President Donald Trump threatened to double customs duties on Chinese imports worth $ 200 billion.

The S & P 500 fell 1.4% Friday morning, with the Nasdaq down 1.7% after the US imposed a 25% tariff on more than 5,700 categories of goods shipped from Canada. China at 12:01 am on Friday morning.

The prolonged market sell off continues a volatile week on Wall Street, as investors have gauged the likelihood of a resolution of the months of trade talks between the world's two largest economies.

Dow's futures were unchanged after the end of the midnight deadline set for both parties to save the deal, but lost 150 points Friday after President Donald Trump tweeted "It's absolutely not no need to rush "now that customs duties are" paid "in the United States by China".

Despite claims by the president that China will absorb the cost of tariffs, it will be US consumers and manufacturers who will bear the burden, in the form of higher prices for consumer goods.

Although Americans do not see a direct impact on their portfolio right away, this situation will change over the next three months as manufacturers and retailers receive and redefine containers of products that are not in transit. Goods that are already being transported by sea will not be taxed at the higher rate unless they arrive after June 1, said the US Customs and Border Protection.

Discussions with China are continuing in a very user-friendly way – there is absolutely no need to rush – while China is paying NOW to the US 25% tariffs on goods and products from one country. worth $ 250 billion. These massive payments go directly to the US Treasury ….

– Donald J. Trump (@realDonaldTrump) May 10, 2019

The Chinese Ministry of Commerce said Thursday that he "hopes that the United States will meet China halfway, make joint efforts and solve the problem through cooperation and consultation."

Negotiations to overcome the stalemate continued on Friday morning between China's top trade negotiators, Chinese Vice Premier Liu He, and the US team, led by the US Trade Representative, Robert Lighthizer.

The intensification of trade tensions has left companies, investors and policymakers around the world concerned about the negative consequences of a world economy already losing momentum.