Wall Street whipsawed by Donald Trump’s surprise threat of additional tariffs on Chinese goods
- The rebound in US stocks ‘leads me to think that while the markets are saying this isn’t much fun, this is still likely to blow over’, an analyst says
- Carnage carry-over from Asian and European trading fades with US markets modestly weaker
US financial markets took US President Donald Trump’s threat to more than double the tariffs on Chinese goods in stride, clawing back much of the lost ground that greeted investors at the open of trading on Monday.
Trump’s surprise tweet on Sunday that he planned to increase tariffs on US$200 billion of Chinese goods to 25 per cent from 10 per cent sent global markets into a tailspin. Whether by design or not, his tweet – which came just before Chinese trade negotiators were due to arrive in the United States to continue talks – caught Asian markets off guard.
The war of words further escalated after US trading hours on Monday, as US Trade Representative Robert Lighthizer accused China of “reneging” on previous trade-talk commitments.
“Most market participants thought the sun was rising with regard to a trade deal and that it was going to get much better. This dented the consensus,” said Richard Bernstein, chief executive officer of Richard Bernstein Advisors in New York.
While the benchmark US stock index, S&P 500, lost 1.6 per cent at the opening bell on Monday, by day’s end it had lost 13.17 points, or 0.45 per cent, dropping to 2,932.47.
