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May 31, 2019, 11:44 AM UTC
By Lucy Bayly
Wall Street was sharply lower Friday morning, with the Dow Jones Industrial Average set to open down almost 300 points as traders balanced the impact of President Donald Trump’s sudden imposition of a 5 percent tariff on all goods from Mexico.
Futures on the S&P 500 and Nasdaq Composite indices also fell, with a decline of 1.1 percent and 1.4 percent, respectively.
“On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,” Trump tweeted late on Thursday, marking an escalation in his fight to build a border wall and stem the flow of asylum seekers.
The dramatic move is another hit to markets still reeling from the potential economic effects of the latest round of tit-for-tat tariffs in the trade war with China. Wall Street has shown increased volatility in recent weeks amid fears the ongoing battle would exacerbate the global economic slowdown and lead to a potential recession in the U.S.
May 31, 201900:28
As a result of the trade war with China, Mexico has risen to become America’s biggest trade partner, sending $347 billion in goods to the U.S., including $93 billion in cars, trucks, and automotive parts; $27 billion in computers; and $15 billion in produce, according to figures from Goldman Sachs.
Negotiations between Beijing and Washington stalled earlier this month after China reneged on a number of key components in the deal.