The Dow’s multi-session nosedive risks extending into a fourth day on Friday after Beijing rebuked President Trump for his $300 billion tariff threat.
All of Wall Street’s top indices fought to avoid an opening bell sell-off following a volatile pre-market session for US stock futures.
Dow Jones Industrial Average futures had portended losses all morning, but a sudden upward move placed the DJIA in position to recover 37.58 points at the opening bell.
S&P 500 futures pointed to losses of 4.21 points at the opening bell, while the Nasdaq prepared itself to endure a 37.9 point decline.
The US stock market prepared for a volatile session on Friday after Chinese officials rebuked President Trump for his threat to impose a new 10% tariff on $300 billion worth of Chinese imports, on top of the 25% tariff that was already in place.
China’s Foreign Minister Wang Yi told reporters that Trump’s tariff threat was not “constructive,” nor was it the “correct” way to solve longstanding disagreements between Washington and Beijing.
“Adding tariffs is definitely not a constructive way to solve the economic and trade frictions. It is not a correct way,” Wang said in remarks cited by the South China Morning Post.
Foreign Ministry spokeswoman Hua Chunying issued an even more ominous statement at a press briefing in Beijing. Reuters reports that she warned Trump that China would not be intimidated by “blackmail” and would adopt “necessary countermeasures” if the White House follows through on its tariff threat.
“If America does pass these tariffs then China will have to take the necessary countermeasures to protect the country’s core and fundamental interests,” Hua said. “We won’t accept any maximum pressure, intimidation or blackmail. On the major issues of principle we won’t give an inch,” she added.
Trump’s attack was surprising; Beijing’s response was not.
Still, the entire saga represents an unwelcome escalation to a trade war that seems as though it will never end.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had just returned from Shanghai, where they conducted the first round of face-to-face negotiations since talks broke down in May.
Despite not striking any major agreements, the negotiators did agree to pick up where they left off at a new round of talks hosted by the United States in September.
Trump praised the “constructive” discussions, but tore into China anyway, alleging that Beijing failed to follow through on agreements to increase its purchases of US farm goods and halt the flow of Fentanyl to the United States.
The president’s mini-tweetstorm marked the second time this week that he had taken to social media to rip China’s government for its behavior during the trade war, and he continued to fan the flames at an August 1 rally.
“I think they want to try and make a deal with us, but I’m not sure,” Bloomberg reports him as saying at a rally in Cincinnati. “Until such time that there is a deal, we will be taxing the hell out of China.”
The Dow, after rising on July 29, must now fight to avoid its fourth straight decline and resist adding to its weekly losses, which already top 635 points or 2.3%.
Last modified: June 23, 2020 2:39 PM UTC