U.S. President Donald Trump on Friday attacked China for retaliating against his newly imposed tariffs, saying Beijing's response was a sign of panic. His remarks followed China's imposition of a 34% tariff on American imports as a reaction to his own equalizing tariff action.
The stock market response was quick and brutal. Wall Street experienced a sharp selling with all major indices declining over 3% during early trading. The Nasdaq Composite, which is weighted with technology stocks, dropped 4%. The index, as reported by the Wall Street Journal, was well on its way to falling into bear market status—measured as a decline over 20% from its recent highs.
Trump had previously this week announced a wide 34% tariff on Chinese imports. That one was paired with new tariffs on all of America's trade partners, including a 26% tariff on imports from India. A base tariff of 10% was leveled against most trade partners, but higher ones were reserved for countries such as China, India, Japan, and those in the European Union.
"China played it wrong, they panicked – the one thing they cannot afford to do!" Trump wrote on his Truth Social page, suggesting that he had expected a diplomatic reaction instead of economic retaliation.
Coerced by journalists on Thursday to answer if he was willing to negotiate with China, Trump replied cryptically: "Well, it depends… If somebody said that we're going to give you something that's so phenomenal, as long as they're giving us something, that's good."
He went on to say that tariffs gave the U.S. huge leverage in negotiations for trade: "The tariffs give us tremendous negotiating power. I've used them beautifully the first time around, as you know, but now we're taking it to a new level, because it's a worldwide scenario, and it's thrilling to watch."
But this stance appeared to go against influential members of his administration who have declared the new tariffs not to be used as bargaining chips.
Howard Lutnick, the Secretary of Commerce and among the primary designers of the new tariff regime, said candidly on Thursday, "I don't think there's any chance… that President Trump's going to back off his tariffs. The world should stop exploiting the United States of America."
Reiterating those words, a senior trade adviser Peter Navarro informed a media organization that the tariffs are "not a negotiation.
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