The Dow Jones Industrial Average tumbled Monday after President Trump threatened to increase tariffs sharply this week on a wide range of Chinese goods because trade talks are not advancing quickly enough.
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Trump, in a pair of tweets on Sunday, said he would increase tariffs to 25 percent from the current 10 percent on $200 billion of Chinese goods. On Monday, the president tweeted that the U.S. loses $500 billion a year to China.
Chinese authorities said, despite the threat, that they would still send a large delegation to the U.S. to continue talks aimed at resolving the one-year standoff between the world’s two biggest economies. However, the trip to Washington was pulled from the official calendar of Vice Premier Liu He, indicating he had canceled the trip.
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On two previous occasions, Trump has pushed back deadlines, in January and March, to raise the tariffs to buy more time for a negotiated settlement. But on Sunday, Trump, who has called himself a “tariff man,” said he’s losing patience. “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump tweeted.
Liu could depart Beijing for Washington this Thursday, three days later than had been scheduled, and then leave Washington a day later, according to the South China Morning Post.
The three major averages experienced their heaviest selling since March 22, and 29 of the Dow’s 30 components were lower right after the opening bell.
Bank of America Merrill Lynch analysts said the market’s reaction to Trump’s threat decreases the likelihood that the two nations will reach a trade deal.
“When policy is very responsive to markets, the policy/markets equilibrium can be elusive,” the bank’s analysts said in a statement. “The result is increased volatility. The immediate market