advertisement
advertisement

Stock market tanks after Trump ‘hereby orders’ American companies to find alternative to China

Stock market tanks after Trump ‘hereby orders’ American companies to find alternative to China
[Photo: Shealah Craighead/The White House/Flickr]

With just a few angry tweets, President Trump managed to tank the U.S. stock market. On Friday, Trump escalated his trade war with China, tweeting: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing … your companies HOME and making your products in the USA.”

advertisement

As soon as the message hit Twitter, U.S. stocks and Treasury yields sank, CNBC reported. The Dow Jones Industrial Average was down about 1.7% shortly after midday, according to Barron’s, while the S&P 500 dropped 1.8%, and the Nasdaq Composite was down 2.2%. CNBC notes that tech stocks were hit particularly hard, with Apple shares dropping 4.1%, VanEck Vectors Semiconductor ETF (SMH) down 3.7%, and Nvidia and Broadcom tumbling around 5%.

The timing couldn’t have been worse. The president’s tweets came just as markets had begun to recover from earlier losses thanks to a soothing speech made by Federal Reserve Chair Jerome Powell at the annual central banking symposium in Jackson Hole, Wyoming. As soon as Powell managed to calm investors’ fears, Trump’s tweets stoked them again. The timing may have been intentional, as Trump name-checked Powell in his tweetstorm, calling him an “enemy.”

In addition to denouncing Powell, Trump’s Twitter threats responded to China announcing new tariffs on U.S. products, including cars. The tariffs will range between 5% and 10% and will be implemented in two batches, on September 1 and December 15, just in time for the holidays.

Trump wasn’t done, though. He also ordered “all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE….all deliveries of Fentanyl from China (or anywhere else!).”

In this tweet, he claims that fentanyl “kills 100,000 Americans a year.” While fentanyl is certainly deadly, it’s not that deadly—it was responsible for an estimated 18,000 deaths in 2016. Total drug overdoses including fentanyl were over 70,000 in 2017.

The extent to which the president’s tweet orders are enforceable remains unclear, but his tweets were certainly enough to throw the markets in disarray.

advertisement
advertisement