President Trump helped spark a tumultuous week on Wall Street by announcing on Twitter Sunday that his administration will be steeply increasing tariffs Friday on $200 billion in goods, rising tariffs from 10% to 25%. “325 Billions Dollars of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%,” he wrote. “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”
Then, early Friday morning, just after levying the new tariffs on China, Trump “caused confusion among traders by tweeting there is ‘no need to rush’ on China trade — then deleting that and other tweets moments later,” Bloomberg reported. Then, he reposted an earlier tweet with minor changes. The White House hasn’t yet offered an explanation for the edited tweets.
“Talks with China continue in a very congenial manner — there is absolutely no need to rush — as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products,” Trump said in the first of a series of tweets early Friday morning (tweets below). “These massive payments go directly to the Treasury of the U.S.”
“The process has begun to place additional Tariffs at 25% on the remaining 325 Billion Dollars,’ he continued. “The U.S. only sells China approximately 100 Billion Dollars of goods & products, a very big imbalance. With the over 100 Billion Dollars in Tariffs that we take in, we will buy agricultural products from our Great Farmers, in larger amounts than China ever did, and ship it to poor & starving countries in the form of humanitarian assistance. In the meantime we will continue to negotiate with China in the hopes that they do not again try to redo deal!”
“Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind,” he said in a follow-up tweet. “Also, much easier & quicker to do. Our Farmers will do better, faster, and starving nations can now be helped. Waivers on some products will be granted, or go to new source! If we bought 15 Billion Dollars of Agriculture from our Farmers, far more than China buys now, we would have more than 85 Billion Dollars left over for new Infrastructure, Healthcare, or anything else. China would greatly slow down, and we would automatically speed up!”
CNBC provided an update on the impact of Trump’s tweets Friday:
The Dow Jones Industrial Average fell about 278 points Friday, while the S&P 500 fell 1.2% and the Nasdaq Composite Index was 1.5% lower. Apple, which has growing China revenue exposure for the iPhone, led the market decline, down nearly 3%. … Friday’s decline added to the deep sell-off this week. The Dow is down more than 900 points this week since Trump’s tariff threat and the S&P 500 is down 3.7%.
Bloomberg notes that China has said that it will retaliate for the new tariffs but hasn’t yet specified how it plans to do so. “Discussions between President Xi Jinping’s top trade envoy and his U.S. counterparts in Washington made little progress on Thursday, with the mood around them downbeat, according to people familiar with the talks,” Bloomberg reports. The talks resumed Friday, Treasury Secretary Steve Mnuchin describing them has having been “constructive.”