The Dow Jones Industrial Average fell by roughly 285.26 points, with the S&P 500 declining by 20.19 points and the Nasdaq Composite by 88.72 points, marking yet another day of dramatic falls for the principal US stock indices.
A 15% trade penalty on $300 billion worth of goods imported from China entered force on Sunday, part of a punishment announced on Twitter by US President Donald Trump barely a week prior. The move followed a Chinese tariff imposition on $75 billion of imports from the US, itself part of a response to a previous round of US trade barriers against the developing nation.
Further incremental trade penalty hikes against Beijing announced by Trump and confirmed by the US Trade Representative are due to enter force on October 1.
The continued crisis in London over the United Kingdom’s future relationship with the European Union following its planned departure from the customs union on October 31 also hurt markets, causing the British pound to slump to its weakest exchange level in three years, according to CNN Business.
CNBC noted that retail stocks fell broadly across the board, as did stocks of computer chip makers like Apple and Nvidia, as many US firms are supplied by China-based factories. However, companies like Boeing suffered losses unrelated to the trade war, as more dismal news emerged about the plane maker's 737 Max passenger jet.
....And then, think what happens to China when I win. Deal would get MUCH TOUGHER! In the meantime, China’s Supply Chain will crumble and businesses, jobs and money will be gone!— Donald J. Trump (@realDonaldTrump) September 3, 2019
"We are doing very well in our negotiations with China," Trump tweeted earlier on Tuesday. "While I am sure they would love to be dealing with a new administration so they could continue their practice of 'ripoff USA'($600 B/year), 16 months PLUS is a long time to be hemorrhaging jobs and companies on a long-shot. And then, think what happens to China when I win. Deal would get MUCH TOUGHER! In the meantime, China’s Supply Chain will crumble and businesses, jobs and money will be gone!"
Indeed, according to data from China’s National Bureau of Statistics (NBS), the country’s GDP only grew by 6.2% year-on-year in the second quarter, the slowest pace in at least 27 years since quarterly economic data became available in 1992. However, key indicators emerged last month in the US that pointed to an economic downturn on the horizon there as well.