Dow Jones down 140 points on US-China trade conflict

Wall Street worries as Trump's trade tariffs against China go into effect this week.

US trader after Dow Jones falls 140 points Source: Bloomberg

The Dow Jones had another volatile day as new Chinese tariffs imposed by US President, Donald Trump,will go into effect on Friday.

Why is the Dow Jones down again?

The Dow Jones slumped again because the US and China are still battling over a trade agreement. Ryan Detrick, senior market strategist for LPL Financial, noted that investors are nervous about the lack of a trade truce.

‘It is looking like a deal with China won't happen this week, which has opened the door to increased uncertainty and a sell-first-and-ask-questions-later mentality,’ said Detrick.

While the two countries have threatened each other with tariffs, Trump said it may be possible for the US to still have productive trade talks with China. A delegation from the Asian country including Chinese vice premier, Liu He, traveled to Washington to negotiate with US trade representative, Robert Lighthizer.

‘It's possible to do it, they're all here. The vice premier one of the most respected men, one of the highest officials in China is coming,’ said Trump.

Can US-China trade talk progress delay tariffs?

While the tariffs are scheduled to go into effect Friday, Ed Mills, public policy analyst at Raymond James noted that China would want to delay the taxes in negotiations.

‘We believe Chinese officials will be looking to delay Friday's tariff increase in order to continue conversations as to the appropriate level of commitments in key areas,’ said Mills.

Mills also noted that a trade agreement could minimise the effects of tariffs, but the US and China need to act soon.

‘Even if tariffs increase tomorrow, there is still time for a resolution and minimal impact on the global economy. But the clock is ticking and both sides still have some major differences to solve,’ said Mills.


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