Selling pressure was compounded following Trump’s announcement to impose trade tariffs. Metals and mining sectors fell quickly, including the SPDR Metals & Mining (XME), which fell 6%.
Trump Tariffs on Chinese Products Drives Market Downwards
The Trump administration on Thursday instructed the office of the U.S. Trade Representative to draw up a list of tariffs on Chinese products totaling up to $60 billion, reports MarketWatch.
“The tariffs are expected to target sensitive technologies that the U.S. considers vital to the U.S. economy in the years ahead, and the announcement follows a similar one focused on steel and aluminum,” MarketWatch reported late Thursday.
Bloomberg is reporting that China’s ambassador to the U.S., Cui Tiankai, responded by saying the country doesn’t want a trade war “but we are not afraid of it,” adding that the Chinese embassy in Washington later issued a statement ratcheting up the rhetoric, saying “if a trade war were initiated by the U.S., China would fight to the end to defend its own legitimate interests.”
The trade crackdown is a big deal because the United States and China are the world’s two biggest economies. A major slowdown in trade could darken the otherwise bright economic outlook.
For latest market news and trends, follow our current affairs category.