U.S. Stocks fall as Tariff Wars Rage
U.S. stocks fell on Monday as China’s decision to raise import tariffs on U.S. products revived global trade war fears and technology stocks remained under pressure.
The Dow Jones Industrial Average (DJI) fell 69.28 points, or 0.29 percent, to 24,033.83. The S&P 500 .SPX lost 10.53 points, or 0.398732 percent, to 2,630.34. The Nasdaq Composite. IXICdropped 49.70 points, or 0.7 percent, to 7,013.74.
China responded to US imposition of tariffs on imports of Aluminium and steel by slamming tariffs by up to 25 percent on 128 U.S. products including frozen pork, wine and certain fruits and nuts.
The tariffs, to take effect on Monday, were announced late on Sunday by China’s finance ministry and matched a list of potential tariffs on up to $3 billion in U.S. goods published by China on March 23.
Soon after the announcement, an editorial in the widely read Chinese tabloid Global Times warned that if the U.S. had thought China would not retaliate or would only take symbolic counter-measures, it can now “say goodbye to that delusion.”
“Even though China and the U.S. have not publicly said they are in a trade war, the sparks of such a war have already started to fly,” the editorial said.
China’s Ministry of Commerce said it was suspending its obligations to the World Trade Organization (WTO) to reduce tariffs on 120 U.S. goods, including fruit and ethanol. The tariffs on those products will be raised by an extra 15 percent.
Eight other products, including pork and scrap aluminum, will now be subject to additional tariffs of 25 percent, it said, with the measures effective from April 2.
“China’s suspension of its tariff concessions is a legitimate action adopted under WTO rules to safeguard China’s interests,” the Chinese finance ministry said.
The retaliatory tariffs came amid escalating trade tensions between Beijing and Washington, which have rocked global financial markets in the past week as investors feared a full-blown trade spat between two countries will be damaging for world growth.
U.S. President Donald Trump is separately preparing to impose tariffs of more than $50 billion on Chinese goods intended to punish Beijing over U.S. accusations that China systematically misappropriated American intellectual property – allegations Beijing denies.