The stock market is plunging on Tuesday trading after President Donald Trump suggested that the United States might wait until after the next year’s presidential election to strike a trade deal with China.
As of 12 p.m. ET, the Dow Jones Industrial Average sank more than 400 points, or 1.5%. The S&P 500 was also down 1.07%, or 33 points, while the Nasdaq Composite dipped 97 points, or 1.13%.
Shoe stocks were similarly in the red: Blue-chip stock Nike Inc. slid 2.16% to $91.54 and fellow sportswear giant Under Armour Inc. dropped 1.74% to $18.12. Footwear powerhouses Caleres Inc. and Deckers Outdoor Corp. saw respective declines of 2.13% to $21.16 and 1.72% to $159.96. Steven Madden Inc. also lost 1.32% to $41.36, and Skechers USA Inc. took a 1.94% hit to $38.90.
Speaking with reporters yesterday, Trump suggested that the White House still intends to move forward with the scheduled 15% levy on Dec. 15, despite recent efforts to settle on a so-called “phase one” trade deal.
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“In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now, and we will see whether or not the deal is going to be right,” he said. “I think it is better to wait until after the election, if you want to know the truth.”
Negotiators from the world’s two largest economies have been discussing the terms of a potential agreement over the past several weeks, which is expected to serve as a truce to their protracted trade war.
In the past year and a half, both Washington and Beijing have imposed new duties on billions of dollars in items coming from both countries. The first round of the fourth tranche of tariffs hit businesses on Sept. 1, introducing a 15% levy on certain Chinese products, including footwear, apparel and accessories. A 15% duty on the second round of the fourth tranche is scheduled to take effect on Dec. 15.
Wall Street’s reaction also comes a day after Trump threatened to tax $2.4 billion worth of French products in retaliation to France’s new digital services tax. Yesterday, the U.S. Trade Representative released a list of items ranging from handbags and makeup to wine and cheese as well as other key exports from France that would be impacted by duties of up to 100%. A number of luxury fashion stocks subsequently closed in the red.
Trump: First Phase of China Deal Is in ‘Final Throes’
China Willing to Work With US to Resolve Concerns Over ‘Phase One’ Trade Deal
Industry Leaders React to Trump’s Trade Speech: ‘It’s Time to Forge a Deal With China’