The Dow Jones Industrial Average fell more than 300 points at market open on Thursday. The S&P 500 also dropped 32 points while the Nasdaq Composite was down 100 points.
Investors have grown increasingly worried after leaders from the world’s two largest economies escalated their tit-for-tat tariff dispute in the past couple weeks. On May 10, Washington imposed a rise in levies from 10% to 25% on $200 billion worth of Chinese products, leading Beijing to retaliate with new tariffs of 5% to 25% on $60 billion of U.S. goods.
The latest move in the protracted standoff between the two countries came from China’s Ministry of Commerce, which warned the U.S. to stop suspending business with Chinese companies after President Donald Trump’s administration placed restrictions on U.S. firms that worked with the blacklisted telecom giant Huawei.
“If the U.S. would like to keep on negotiating, it should, with sincerity, adjust its wrong actions,” ministry spokesperson Gao Feng said, according to multiple news reports. “Only then can talks continue.”
Trump had also ordered U.S. Trade Representative Robert Lighthizer to begin the process of raising duties on nearly all remaining imports from China, valued at approximately $300 billion, which would include footwear.
Tech stocks were hit particularly hard this morning, while shares for major footwear and retail companies were mixed. Nike Inc. slid 1.2% to $82 and Deckers Outdoor Corp. declined 0.4% to $149.50, but J. C. Penney Company Inc. was in the green 1.5% to $1.02.
The three were among the more than 170 footwear companies that penned a letter urging President Donald Trump to remove footwear from his latest tranche of tariffs. According to the Footwear Distributors & Retailers of America, which released the memo on Monday, each U.S. family would have to spend an extra $131.93 on footwear annually should the threatened tariff increase take effect. It added that consumers would pay $7 billion in additional costs each year for shoes.
“These are the real numbers we have calculated; they are not empty rhetoric,” FDRA president and CEO Matt Priest previously told FN. “Import taxes on shoes are not paid by China. They are paid by every American, every time they buy shoes. This is not fair, it is not sustainable and it will not solve our trade issues.”
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