By: Ezra Ashkenazi
This past Friday, President Trump called on U.S. companies to cease to do business with or in China. This is just the latest in long overseas tax and tariff war between the U.S. and China. The president also said that he would hit back at China for Beijing’s latest tariff increase. Ever since this statement was released, stocks went falling drastically. The Dow Jones Industrial Average plummeted over 400 points right after the president posted this message on Twitter this past Friday. Trump also told major international shipping companies to block any powerful opioid drug fentanyl from entering or leaving China.
As a result, the stocks of UPS, Federal Express, and Amazon decreased as traders tried to understand what the block would cause the company and its success. In addition, the U.S. said that it would impose 10% duties on the 300 billion dollars’ worth of Chinese products that weren’t already subject to tariffs. Then China said it would retaliate with taxes on 75 billion dollars’ worth of American goods. Overall, the market has been very fidgety lately, with stocks jumping up and down as traders fear that the war between the U.S. and China will put the U.S. back into a recessionary period. Randy Frederick, the vice president of trading and derivatives at Charles Schwab, said, “There’s been reason to be concerned that this might not get resolved anytime soon, but the market is accepting that not only is it not likely, it’s very unlikely.”
The S&P 500 was down 1.6% as the Nasdaq dropped 2%, although these are substantial drops, the tech companies have dropped the most. According to a Vos Iz Neias article, “Technology companies, which have much to lose in the trade battle, accounted for the biggest share of the market’s losses. Chipmaker Nvidia slid 4.8% and Apple lost 4%.” As a result of all this caution in the stock market, investors started to invest in safer options until the market hopefully gains steadiness once again, this sent gold and bond prices up as traders have resided in this option. The tariff war between the U.S. and China has really hurt businesses and investors all across America, and although China has appealed Trump’s request of negotiation, we hope this will end as soon as possible.
