Markets Reel as Trump Blasts the Horn for China Trade War II
The Dow and S&P 500 are down Monday morning at the prospect of another U.S.-China trade war. | Image: Scott Heins/Getty Images/AFP
- Another trade war seems imminent as Trump blasted China for the coronavirus over the weekend.
- The president even suggested China allowed the virus to spread on purpose to sabotage the United States as revenge for the trade war.
- Trump’s hard-line against China has spooked the stock market.
Trade war tensions are rising again four months after the landmark Phase 1 deal with China.
President Donald Trump slammed Beijing on Sunday for failing to contain the coronavirus. He even suggested China may have created it, or let it spread to the rest of the world on purpose. It’s the latest, most blustery saber-rattling from the president yet.
Trump’s war of words escalated the increasingly tough rhetoric toward China from other White House officials. It’s looking increasingly likely that the White House will abandon the Phase 1 trade deal with China and launch another volley of stiff tariffs.
Trump Says China May Have Spread Coronavirus as Revenge
In a Fox News virtual Town Hall interview on Sunday, Trump said China could have stopped coronavirus from spreading but failed:
It could have been stopped on the spot. They [China] chose not to do it. Or something happened. Either there was incompetence, or– they didn’t do it for some reason. And we’re going to have to find out what that reason was.
When asked if “China misled the global community,” Trump’s answer was unequivocal:
Well, I don’t think there’s any question about it. We wanted to go in, they didn’t want us to go in early, very early. You’ll see that because things are coming out that are pretty compelling now. So I don’t think there’s any question.
And he suggested they might be covering up something worse than incompetence:
We wanted to go into China, they didn’t want us to go in because they didn’t want to have us see it. Maybe they were worried about competence; maybe they were worried about something else…
He also referenced the theory that coronavirus was created in a vaccine laboratory in Wuhan.
So you could fly out of Wuhan where the primary problem was, all of the problems essentially, also where the lab is…
And finally, Trump said China might have allowed the virus to spread on purpose to sabotage the United States economy as revenge for the trade war:
What they really treated the world badly on, they stopped people going into China, but they didn’t stop people going into the USA… And the case could be made. They said, ‘Hey look, this is going to have a huge impact on China, and we might as well let the rest of the world,’ because the last people they want– We’ve had a great year against China prior to the virus coming.
The trade war detente seems to be unraveling.
Trade War II Looms Over Stock Market
The president’s pointed remarks escalated the White House’s hard-line against China late last week and into the weekend. On Thursday, Trump threatened new tariffs against China over coronavirus:
We signed a trade deal where they’re supposed to buy, and they’ve been buying a lot, actually. But that now becomes secondary to what took place with the virus. The virus situation is just not acceptable.
Then on Sunday, in an interview with ABC, U.S. Secretary of State Mike Pompeo said there is “enormous evidence” that coronavirus originated in a lab in Wuhan , China.
Just as restrictions on movement and commerce are lifting in many U.S. states, giving hope for an economic recovery, the Oval Office appears to be gearing up for another trade war. Trump’s statements spooked the stock market into a sharp dive Friday.
Dow futures fell over 300 points Sunday evening . The blue-chip index fell 300 points to start the week.
