Tensions regarding trade wars threats between the United States and China caused investors to balk.
The countries have been adding new tariffs to hundreds of different products imported from each other.
The issue started with the United States when President Donald Trump added trade tariffs to steel and aluminum imports. China responded by adding 25 percent tariffs on 106 imported products from the United States, such as orange juice, aircrafts and soybeans.
The U.S. responded with a list of about 1,300 additional Chinese products it intended to target with 25 percent tariffs. This tit-for-tat action against each other caused Wall Street to open strikingly lower. That said, it has been experiencing a slow recovery for a higher close.
Around the Globe
The tension from the newly implemented trade tariffs has been felt around the globe. Stock markets in Europe also dropped. Investors were surprised at how quickly China responded to the American import tariffs. That said, the European markets also recovered, closing only slightly lower than they had been.
Beijing has been quite direct in its opposition to the additional trade tariffs proposed by the United States. The Chinese government said it “strongly condemns and firmly opposes” the tariffs. Moreover, it also called them “unilateralistic and protectionist,” while promising retaliation.
The country made it clear that it did not want to implement its own additional tariffs but was had to protect its own economy. The goal is to balance out the tariffs it pays with those it receives.
Will Anyone Win?
The two countries appear to be continuing their tit-for-tat strategy. China’s new tariffs are specifically aimed at areas of political importance. These include agriculture, American chemicals, corn products and certain types of aircraft, according to the country’s finance ministry.
Other products to be affected by the Chinese import tariffs include cigars and tobacco, whiskey, lubricants, certain types of beef, propane and certain plastic products. Some trucks, electric vehicles and SUVs, as well as U.S. orange juice, cotton, certain types of wheat and sorghum, will all face new duties, added the Chinese ministry in its announcement on the subject.