President Donald Trump's trade war with China has taken a toll on the U.S. stock market.
After China announced it would raise tariffs on $60 billion worth of American goods, the Dow Jones industrial average fell Monday afternoon by more than 700 points or nearly 3 percent, according to The Washington Post. Similarly the Standard & Poor's 500-stock index had seen a drop of 2.5 percent, the Nasdaq Composite fell by 3.5 percent and 10 out of 11 market sectors were in negative territory as of 12 p.m. ET, with the only exception being utilities. Both Standard & Poor's and Nasdaq are en route to having their worst day of 2019, at least so far.
For the Dow Jones specifically, the drag was exacerbated by hits experienced at companies like Apple (which dropped 5.78 percent), Caterpillar (which dropped 5.11 percent) and Boeing (which dropped 4.65 percent).
And the effects of Trump's trade war were not limited to the American market. The Shanghai Composite fell by 1.2 percent, Japan's Nikkei dropped 225 points, and overall, Asian markets were down by more than 1 percent. European markets also saw major drops, with the German Dax falling by 1.5 percent, France's CAC falling by 1.2 percent and the Pan European Stoxx 600 falling by 1.2 percent.
White House chief economic adviser Larry Kudlow warned on Sunday that there could be negative consequences to Trump's trade war, admitting that "both sides will suffer on this" while at the same time claiming that the overall economic impact would not be significant, because the economy is "in terrific shape."
Kudlow also argued that Trump's trade policies were "a risk we should and can take without damaging our economy in any appreciable way." After being pressed by Fox News Sunday anchor Chris Wallace, Kudlow said that "in fact, both sides will pay. Both sides will pay in these things."
Trump sent out a series of tweets on Monday responding to Kudlow's comments.
"Their is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today. This has been proven recently when only 4 points were paid by the U.S., 21 points by China because China subsidizes product to such a large degree. Also, the Tariffs can be completely avoided if you by from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs. Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!" Trump wrote in the initial pair of tweets.
Trump later tweeted that "there will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse! I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out!"
The president also added that "the unexpectedly good first quarter 3.2% GDP was greatly helped by Tariffs from China. Some people just don’t get it!"