U.S. stock markets closed sharply down yesterday as investors reacted to the reality of a trade war between the United States and China. The Dow Jones Industrial average closed down more than 1,000 points, or 2.5%, while the S&P 500 and Nasdaq were down 3.46% and 4.31%, respectively. Analysts expect further declines today after China announced 125% retaliatory tariffs against American goods.
Though the Trump administration paused some tariffs for 90 days earlier this week, tariffs against China, Mexico and Canada remained. A 145% tariff is now in place against all Chinese goods shipped into the United States; Mexico’s and Canada’s import rates stand at 25%.
According to reporting by The Wall Street Journal: “Trump’s goal is to eliminate the trade deficit once and for all through tariffs, which he says will help lure more manufacturing back to the U.S., creating jobs at home and stanching the flow of U.S. money to China.”
As a result of the 90-day pause, the European Union announced it would suspend retaliatory tariffs against the United States for the same period. A 10% baseline tariff remains for European Union imports and for the remainder of other U.S. trading partners.
European Commission President Ursula von der Leyen stated in a National Marine Manufacturers Association press release, “We want to give negotiations a chance. While finalizing the adoption of the E.U. countermeasures that saw strong support from our member states, we will put them on hold for 90 days.”
While the news from the European Union is positive, the 145% tariff on goods from China could have a serious impact on U.S. marine manufacturers, especially those that rely on manufactured electronics materials, including microchips and printed circuit boards.
NMMA said it “has consistently urged the administration to take a targeted, nuanced approach to trade enforcement, one that strengthens America’s position globally while avoiding harm to domestic producers. The recreational boating industry is a proudly made-in-America industry that supports more than 812,000 American jobs and generates $230 billion in annual economic impact.”
Trade Only Today will post more reporting as the tariff situation continues to develop.
