The fears of economic slowdown made investors nervous and Wall Street extended its losses. The Dow Jones Industrial Average fell 0.9%, or 383 points, to close at 42,418. The S&P 500 also fell 1.4 per cent and the Nasdaq lost 2 per cent.
The market downturn, however, followed China’s retaliatory tariffs on US imports, particularly on agriculture products like soybeans, pork, beef, chicken and cotton. These tariffs, an response to Washington’s 10 percent tariff on Chinese goods, may further stress U.S. farmers by shifting demand to other countries.
Investor’s concerns were fueled when Donald Trump wouldn’t say no to recession, instead talking about a "e;period of transition"e; during his weekend interview. His remarks heeded into the fears that the White House is ready for economic turbulence and expects it to be pretty short.
Rupert Thompson of IBOSS thinks that Trump’s aggressive tariff policy may lead to the escalation of economic issues:
“The hope was that Trump’s threats would not materialize, but recent actions suggest otherwise. Twenty percent tariffs on China, 25 percent on Canada and Mexico, and additional steel and aluminum tariffs will be in place soon.”
Furthermore, there are concerns in the form of Elon Musk’s Tesla has lost 50 per cent of its value from its all-time high, and the government job cuts resulting from Musk’s DOGE efficiency drive are adding to the economic decline.
As the uncertainty rises, the analysts are concerned that the growth of the US economy may slow down considerably than it may pick up. Investors had thought that market declines would make Trump change his trade policies, but the latest events indicate that the administration is ready to suffer short-term loss for the long-term gain.
