American markets fell on Monday as the trade war between Washington and Beijing escalated. Both countries implemented tariffs on the other’s exports, and according to a report from CNBC, additional sanctions may still be levied on additional Chinese goods.
Worries were further compounded over the weekend when the Chinese government backed out of the upcoming trade talks with Washington. According to CNBC, Beijing has accused the United States of “trade bullyism,” and also accused the U.S. of trying to impose its agenda on other countries through economic means.
While China hurled accusations at the United States, Peter Navarro, director of the National Trade Council, fired back on Monday. The director told the hosts of CNBC’s “Closing Bell” that it’s “far more difficult to make a deal with China than it would be with Mexico.” Navarro cited China’s “egregious practices” in the past as the reason for the difficulty.
The S&P 500, Dow Jones Industrial Average, and the NASDAQ all closed lower on Monday afternoon. According to Reuters, the S&P 500 was down 0.26 percent at Monday’s close, while the Dow Jones Industrial Average lost 0.21 percent. The NASDAQ took the biggest hit and fell by 0.57 percent.
The effects of the tariffs are still largely to be seen; however, some experts fear that their impacts will be felt by sectors not originally targeted.
“One of the bigger risks with these tariffs going into effect is that the United States may be pushed out of the Chinese market and it is a growing market,” said Raymond James chief economist, Scott Brown, while speaking to Reuters.
As the trade war continues, the United States has also begun targeting Chinese military acquisitions. According to a report from NEWSREP, “the American government has imposed sanctions on the Chinese military over an order of Russian anti-air missiles and aircraft.” This move may be mostly aimed at the Russians rather than the Chinese.
However, it wasn’t only tensions with China that drove stocks down. According to Reuters, perceived instability in the White House in the wake of rumors that Deputy Attorney General Rod Rosenstein was resigning also played a factor in Monday’s poor market performance. Rosenstein is currently “overseeing” the ongoing Mueller investigation, and according to the Associated Press, Trump plans to be meet with Rosenstein on Thursday to ascertain “what’s going on.”
Although relations with Beijing are cooling, not all hope that a deal can be reached is lost. According to Reuters, officials from the Chinese government claimed that they were open to more talks with the United States as long as the discussions were “based on mutual respect and equality.” The officials also stated that the country was prepared to “fight if necessary.”
Despite the fragile condition of Sino-U.S. relations, CNBC reported that Trump “signed a revised trade deal with South Korea,” while he was at the U.N. General Assembly on Monday. According to the report, Trump also stated he was “likely” to hold additional discussions with North Korea.