The stock market is attempting a rebound following two consecutive days of sharp losses on renewed fears over the trade war between the United States and China.
The Dow Jones Industrial Average was up a meager 9 points (or 0.036%) on Wednesday morning after recording a 470-point loss on Tuesday, while both the S&P 500 and the Nasdaq Composite rose 0.03%.
The slight advance comes shortly after President Donald Trump posted on Twitter that Chinese delegates will be arriving in the U.S. this week to negotiate a deal to end their yearlong tariff dispute.
“The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come,” he wrote in the two-part tweet. “Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming the the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers…great for U.S., not good for China!”
On Sunday, Trump threatened to ramp up levies on $200 billion worth of Chinese goods, increasing the rate from 10% to 25%, and set a 25% tariff on $325 billion of currently untaxed goods, including many consumer products.
While some had looked at the warnings as a negotiating tactic, Wall Street saw significant cuts on both Monday and Tuesday, with the Dow Jones recording on Tuesday its worst day in about four months.
Retail, footwear and apparel groups have condemned the trade dispute, citing its impact on American manufacturers and consumers and manufacturers, noting that higher tariffs could reverse some of the positive economic trends the country has enjoyed so far this year.
“We strongly oppose the president’s announcement that he will continue to penalize American families and add additional obstacles to economic growth by imposing further tariffs on U.S. imports from China,” said Rick Helfenbein, president and CEO of the American Apparel & Footwear Association. “As has been made clear by the administration’s use of tariffs during the past year, tariffs are an additional tax burden placed on Americans. These taxes are not paid by foreign nations, and they result in higher costs that are simply passed on to the American consumer.”
David French, senior vice president for government relations at the National Retail Federation, stated: “A sudden tariff increase with less than a week’s notice would severely disrupt U.S. businesses, especially small companies that have limited resources to mitigate the impact. If the administration follows through on this threat, American consumers will face higher prices, and U.S. jobs will be lost.”
Washington has already imposed tariffs on $250 billion worth of Chinese imports, while Beijing retaliated with levies on $110 billion in U.S. goods.
Watch the highlights at the 2018 FNAAs.
How Retailers and Wall Street Are Responding to Trump’s Latest Tariff Threat
Trump Threatens to Increase Tariffs on China to 25% on $325B of Untaxed Goods as Trade Talks Move ‘Too Slowly’