Donald Trump earlier threatened to increase tariffs on Chinese goods from 10 to 25 percent on Friday, saying that the US has been losing billions of dollars to China on trade. The president believes that the situation must change.
US stocks dropped sharply on Monday morning after Donald Trump promised to increase tariffs on China. Thus the Dow Jones industrial lost almost 400 points, while NASDAQ fell 182 points. The S&P 500 opened lower by almost 37 points.
The situation occurred after a recent announcement by the US president saying that Washington would raise tariffs on a number of Chinese goods from 10 to 25 percent starting Friday.
China was reportedly mulling over the possibility of scraping the next round of talks after Trump’s statement.
The Shanghai Composite Index has dropped by 5.6 percent to 2906.46, while the Shenzhen Composite has lost 7.4 percent and stands at 1515.8 after closing earlier today.
READ MORE: Trump on Tariffs: US Loses $500bn Trading With China, Not Going to Do it Anymore
Earlier, the two countries were trying to work out a mutually acceptable trade agreement that would put an end to an almost year-long tariff war between the world’s largest economies. Both China and the US have cited progress in the talks, and Trump even postponed the tariff spike that was scheduled to go into effect on 1 March.
Beijing and Washington have been engulfed in a trade dispute since June, when US President Donald Trump made an announcement that the United States would impose 25 percent tariffs on Chinese goods worth of $50 billion in a bid to fix the US-Chinese trade deficit. Since then, the two countries have exchanged several rounds of trade tariffs.