Wall Street is treading carefully on the first day of trading after President Donald Trump’s new tariffs on Chinese goods have taken effect.
The Dow Jones Industrial Average opened down more than 260 points, or 1%, on Tuesday morning. (Major benchmark indexes were closed on Monday for the Labor Day holiday.) The S&P 500 skidded 22 points, or 0.75%, while the Nasdaq Composite fell 60 points, or 0.76%.
On Sept. 1, the United States imposed a 15% tariff on $112 billion worth of Chinese imports, while China hit a variety of American products with duties between 5% and 10%. It marked the first set of the fourth tranche of tariffs, which affects footwear and apparel as well as electronics, toys and other accessories. More tariffs will be implemented on Dec. 15, but more than two thirds of China-made shoes were hit on Sept. 1.
The selloff impacted footwear stocks: Among them, Nike Inc. was in the red 0.37% to $84.19, Crocs Inc. slid 1.08% to $22.06, Skechers USA Inc. dropped 1.2% to $31.28, Steven Madden Ltd. dipped 1.35% to $32.77 and Shoe Carnival Inc. edged lower 1.61% to $30.24. All five companies were part of the 200-plus firms that sent a joint letter last week urging Trump to abandon the proposed levies on a total of $300 billion in Chinese imports.
This morning, Trump took to Twitter to share that Washington was doing “very well” in negotiations with Beijing. In the two-part tweet, he also threatened to take a tougher stance against the country if he is reelected in 2020 — unless the leaders of the world’s two largest economies soon settle on a trade agreement.
“While I am sure they would love to be dealing with a new administration so they could continue their practice of ‘ripoff USA’ ($600 B/year),16 months plus is a long time to be hemorrhaging jobs and companies on a long-shot,” Trump added. “And then, think what happens to China when I win. Deal would get much tougher! In the meantime, China’s Supply Chain will crumble and businesses, jobs and money will be gone!”
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Watch the highlights at the 2018 FNAAs.