Stocks opened lower as rhetoric between President Donald Trump and China heated up ahead of their trade talks in Washington, D.C. on Thursday.
The Dow Jones industrial average fell 226 points, or 0.9%, in early trading, while the Standard & Poor’s 500 slid 30 points, or 1.1%. The tech-heavy Nasdaq fell103 points, or 1.3%.
On Thursday, China’s Commerce Ministry said in a statement that the country would impose “necessary countermeasures” if higher tariffs that Trump earlier threatened in the week are enacted on Friday. Gao Feng, a ministry spokesman, later said that China has the “determination and ability to defend its own interests.”
The comments from China come after Trump again threatened harsh tariffs if no agreement is brokered during trade negotiations in a rally in Florida on Wednesday. He said China “broke the deal” in trade discussions.
“You see the tariffs we’re doing?” Trump said. “Because they broke the deal. … They broke the deal. So they’re flying in. The vice premier tomorrow is flying in, but they broke the deal. They can’t do that. So they’ll be paying. If we don’t make the deal, nothing wrong with taking in more than $100 billion a year.”
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Investors’ fears of escalating trade tensions were reignited on Sunday after Trump tweeted that he would increase duties on $200 billion of Chinese imports to 25% from 10%. Another tweet threatened a 25% tariff on $325 billion of goods that are currently untaxed.
The uncertainty pushed down stocks this week so far. The Dow Jones industrial average has lost 2% since the end of last week. The S&P 500 is down 2.25% and the Nasdaq is 2.7% lower.
The threats also delayed the scheduled trade talks, which were supposed to resume on Wednesday. They have been pushed to Thursday and Friday.