The Dow Jones Industrial Average plunged over 700 points on Thursday after President Donald Trump announced $60 billion in tariffs directed at China.
The 724-point drop on the Dow, or 2.9 percent, was the largest since early February. Similarly, the S&P 500 experienced a 2.5 percent decline, while the Nasdaq gave back 2.4 percent.
“The market doesn’t like trade wars, the market doesn’t like that the Fed is adamant about raising rates,” Matt Schreiber, president and chief investment strategist at WBI Investments in Red Bank, New Jersey, told Bloomberg.
Trump announced his tariffs against China from the White House on Thursday. He cited the U.S.’s record trade deficit with the Asian nation, and China’s theft of intellectual property as the reasons for his action.
“But we have a trade deficit … there are many different ways of looking at it, but no matter which way you look at it, it is the largest trade deficit of any country in the history of the world,” said Trump.
“We have a tremendous intellectual property theft problem,” the president added, noting that this has cost America hundreds of billions of dollars. “It’s going to make us a much stronger, much richer nation.”
The tariffs came following an investigation by U.S. Trade Representative Robert Lighthizer lasting several months.
Lighthizer said the tariffs would focus on theft of U.S. technologies.
“This is an extremely important action. Very significant and very important for the future of the country, really across industries,” he stated.
Lighthizer told the Senate Finance Committee on Thursday before the White House announcement that targeted Chinese products will include aeronautics, modern rail, new-energy vehicles and high-tech products.
His office will publish a list of items targeted by the tariffs in next 15 days, and there will be a 30 day period for public comment thereafter, CNBC reported.
— FOX Business (@FoxBusiness) March 22, 2018
In anticipation of Trump’s tariff announcement, China warned there could be retaliatory measures.
“A trade war does no good to anyone. There is no winner,” China’s Premier Li Keqiang said at a news conference in Beijing, CNN reported.
Trump’s top trade adviser, Peter Navarro, said the decision to impose tariffs came after efforts to change Chinese trade practices — dating back over 15 years — failed to produce results.
“Administrations before us and this administration has tried very, very hard to work with the Chinese,” Navarro stated. “Talk is not cheap. It has been very expensive to the American people.”
According to Fox Business, other factors causing downward pressure on the market were Facebook’s Cambridge Analytica data controversy, Trump’s lead private attorney John Dowd resigning, and the Federal Reserve raising interest rates.
Facebook fell 2.7 percent in trading on Thursday.
Earlier this month, Trump announced the imposition of a 25 percent tariff on steel and a 10 percent tariff on aluminum, which appeared mainly directed at China.
CBS News reported that the president quickly exempted Canada, Mexico and on Thursday added the European Union, Australia, Argentina, Brazil and South Korea to that list.
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