Stock markets plunge
Dow drops 617 points after China announces higher tariffs
BEIJING — Sending Wall Street into a slide, China announced higher tariffs Monday on $60 billion worth of American goods in retaliation for President Donald Trump’s latest penalties on Chinese products.
Duties of 5 percent to 25 percent will take effect on June 1 on about 5,200 American products, including batteries, spinach and coffee, China’s Finance Ministry said.
With investors worried about the potential economic damage on all sides from the escalating trade war, the Dow Jones Industrial Average fell 617 points, or 2.4 percent, to 25,324.99. At one point, it was down 719 points. Apple and Boeing were the Dow’s biggest decliners. Both companies get a significant amount of revenue from China and stand to lose heavily if the trade war drags on. Boeing slid 4.9 percent.
The broader S&P 500 index fell 69.53 points, or 2.4 percent, to 2,811.87. The index is coming off its worst week since January, though it’s still up sharply for the year. The Nasdaq, which is heavily weighted with technology stocks, slid 269.92 points, or 3.4 percent, to 7,647.02 — its worst drop of the year.
The Russell 2000 index of small company stocks lost 49.99 points, or 3.2 percent, to 1,523.
“We appear to be in a slow-motion train wreck, with both sides sticking to their positions,” said William Reinsch, a trade analyst at the Center for Strategic and International Studies and a former U.S. trade official. “As is often the case, however, the losers will not be the negotiators or presidents, but the people.”
Beijing’s move came after the U.S. raised duties Friday on $200 billion of Chinese imports to 25 percent, up from 10 percent. In doing so, American officials accused China of backtracking on commitments it made in earlier negotiations. The same day, trade talks between the two countries broke up without an agreement.
On Twitter, Trump warned Xi that China “will be hurt very badly” if it doesn’t agree to a trade deal. Trump tweeted that Beijing “had a great deal, almost completed, & you backed out!”