Dow Plummets 700 Points After China Makes Its Move

Investors around the world were waiting to see how China would respond to the new US tariffs put into place last week, and Monday morning brought the answer: Beijing will raise tariffs on about $60 billion worth of imports from the US, reports the Wall Street Journal. The move came shortly after President Trump warned China in a tweet that retaliation would only make things worse for Beijing. It also came just ahead of the open for US markets, and things have since gone from bad to worse: The Dow was down more than 460 points in the opening minutes, or about 1.8%, and the S&P and Nasdaq were down similarly, per MarketWatch. Just before 1:30pm EDT, the Dow had plummeted further, and was down more than 700 points, or about 2.7%.

China will raise tariffs as much as 25% on about 5,000 products starting June 1, reports CNBC. The total figure is less than the $200 billion worth of goods affected by the new US tariffs. "Over the past week, hopes for at least a partial and temporary ceasefire between the two sides have given way to the prospect of a rapidly escalating and broadening economic conflict between the two countries," a professor of trade policy at Cornell University tells the Washington Post. In one of his tweets Monday, Trump addressed the impasse: "I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don't make a deal because companies will be forced to leave China for other countries," he wrote. "Too expensive to buy in China. You had a great deal, almost completed, & you backed out!" (More US-China relations stories.)