The Dow Jones industrial average plunged more than 3 percent Monday, headed for the worst start to a second quarter since the Great Depression after China announced it was responding to President Trump’s new tariffs on steel and aluminum but implementing its own tariffs on imports from the US.
Responding to Trump’s tariffs of 25 percent and 10 percent on Chinese steel and aluminum, respectively, China announced a 15-percent tax on more than 120 U.S. imports, including pork, fruit and nuts.
China is expected to impose further tariffs on U.S goods in response to Trump’s plan to impose up to $60 billion in levies on Chinese imports.
The Hill reports:
The S&P 500 index had dropped 2.6 percent and fell into correction territory — a 10-percent drop from its 52-week high. The Nasdaq had taken the heaviest losses, falling more than 3 percent into its own correction.
Shares in Amazon fell 4.5 percent Monday as Trump continued his public attacks the online retailer and its owner, Jeff Bezos.
Trump has unleashed a barrage of tweets accusing Amazon of not paying enough in taxes and underpaying the U.S. Postal Service.
Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed. Also, our fully tax paying retailers are closing stores all over the country…not a level playing field!
— Donald J. Trump (@realDonaldTrump) April 2, 2018
The online retailer was the biggest drag on the equity benchmark Monday, a position its held for a week as it plunged 12 percent since Axios reported that the president was “obsessed” with regulating the company. That wiped about $75 billion from Amazon’s market capitalization.
Taking that big of a bite out of a company the size of Amazon can’t help but hurt the broader market. Amazon alone has wipe almost 10 points off the S&P 500 — it’s the fourth-biggest issue in the index at 2.5 percent. The hit is more than double the next biggest drag on the equity benchmark, which has fallen more than 3 percent in that time and now sits in correction territory.