Dow Plunges After Donald Trump ‘Orders’ U.S. Companies To Cease Doing Business With China
On Friday, President Donald Trump took to social media to urge American companies to cease doing business with China. In a Twitter thread, the president accused China of stealing money from the United States.
“The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP,” Trump wrote, adding the following.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
The president said that he will “respond” to China’s retaliatory tariffs this afternoon, telling Amazon, Fed Ex, UPS and the Post Office to refuse all deliveries of the drug Fentanyl from China.
He concluded the Twitter thread by vowing to keep the U.S. economy “larger than that of China.”
The stock market is not reacting well to Trump’s tweets. The Dow Jones Industrial Average cratered following the president’s threats, dropping 500 points, according to CNBC.
Nvidia and Broadcom shares dropped around five percent, Apple shares dropped more than four percent and VanEck Vectors Semiconductor ETF (SMH) shares dropped 3.7 percent.
Via Twitter, CNBC added that Amazon, Fed Ex and UPS shares are also dropping — UPS shares slid 3.7 percent, Amazon shares dropped 1.48 percent and Fed Ex shares dropped 2.37 percent.
Trump’s message for American companies doing business with China came following yet another attack on the Federal Reserve and its chairman Jerome Powell, and following China’s decision to slap tariffs on $75 billion worth of American goods.
Trump has long criticized the Federal Reserve, urging it to cut interest rates, and suggesting that it is to blame for economic issues the country is facing.
?? The S&P is off nearly 2%
?? The U.S. dollar is lower
?? Tech shares –especially semiconductors– are down
?? Oil continues to sell-offThe latest on markets: https://t.co/JeI8zCpmXa pic.twitter.com/LvAyvHI1NJ
— Bloomberg (@business) August 23, 2019
Chief Investment Strategist at State Street Global Advisors Michael Arone defended Powell against criticism, telling CNBC that the chairman has to walk a “tightrope,” balancing between Wall Street, the issues created by the trade war with China and a “very aggressive president.”
Trump’s attacks on Powell, China and U.S. corporations doing business with the world’s second largest economy come amid widespread fears of recession.
As The Inquisitr reported, the yield curve inverted last week for the first time since 2007. Considered a reliable predictor of recession, the yield curve has inverted before each economic decline in the past 50 years.
U.S. "totally unprepared" to deal with recession warns Union Bank chief economist https://t.co/Rk9FckwtUo
— Newsweek (@Newsweek) August 23, 2019
Other signs of recession are also in place. The manufacturing sector is thought to already be in recession given that it has shrunk during two consecutive quarters. The tariffs Trump has imposed on China, coupled with job-destroying automation, have also contributed to the economic slowdown, according to some experts.
