U.S. stock markets plummeted today following an announcement by President Donald Trump that made official his long-rumored tariffs against China.
The Dow Jones Industrial Average dropped more than 700 points as of the market’s close, while the S&P 500 fell 2.5 percent to its lowest point since early February. And the Nasdaq saw a similar decline of 2.4 percent.
Market investors have shown increasing concern about possible trade wars with America’s overseas partners. After hitting records highs in late January, the major stock indexes have had a tumultuous past few weeks, falling precipitously and undoing months of gains.
In a speech at the White House this afternoon, Trump presented his plan to impose an estimated $60 billion in tariffs on imports from China. According to the administration, the proposed duties are intended to punish China for intellectual-property abuses and to correct long-standing trade imbalances.
The White House National Trade Council, led by Peter Navarro, has said it will release an official list of the tariffs in 15 days, but trade officials are predicting about 1,300 types of goods could be affected, including shoes, apparel and electronics.
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Footwear manufacturers and retailers have already voiced their opposition to the plan. On March 20, 17 trade associations from the fashion and soft-goods industries issued a joint letter spelling out their concerns. The letter pointed out that the U.S. already imposes high border taxes on many of these consumer products. In fact, footwear duties are, on average, 11 percent and can go up to 67.5 percent on certain styles, according to the Footwear Distributors & Retailers of America.
The letter also noted that additional tariffs on imports from China will raise prices at the register for U.S. consumers. “At a 25 percent additional duty rate, we estimate that a family of four will end up paying about $500 more to buy these basic consumer products every year,” said the trade groups. “Of course, Americans may balk at those price increases and purchase less, especially lower-income Americans, who would bear the brunt of this regressive tax.”