The Dow Jones Industrial Average began the week’s opening session stumbling as it fell over 150 points due to trade negotiations between the United States and China stalling. In addition, the new tariffs imposed by China took effect today as both economic superpowers don’t appear to be relenting in this ongoing trade dispute.
In addition to the Dow, the S&P 500 fell 15 points while the Nasdaq Composite dropped over 30 points as of 11:45 a.m. ET. Combined, DowDupont Inc and Johnson & Johnson helped to bring the Dow down by 3.7%.
“One of the bigger risks with these tariffs going into effect is that the United States may be pushed out of the Chinese market and it is a growing market,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
In the latest round of tariffs, U.S. President Donald Trump announced he would be move forward with imposing a 10% tariff on $200 billion worth of Chinese goods that includes a step-up increase to 25% by the end of the year. The new round of U.S. tariffs on 10% of Chinese goods signals that the U.S. won’t relent on the application of pressure to force China’s hand in making a deal when actual negotiations materialize.
Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country – and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be “Tariffed!”
— Donald J. Trump (@realDonaldTrump) September 17, 2018
The list of goods affected by the new round of tariffs was apparently modified by the White House, which removed about 300 goods from an initial list that included smart watches, certain chemicals, bicycle helmets, high chairs, and other goods.