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US markets see sharp drop despite Donald Trump’ 90-day tariff pause.
The stocks gave back much of their historic gains from the day before as Wall Street weighed a trade war that has cooled in temperature but is still threatening the economy.
The S&P 500 fell 5.8 per cent, while the Dow Jones Industrial Average dropped 1,746 points. The Nasdaq composite sank 5.8 per cent by midday.
The positive inflation report also did little to cheer up the market as the gloom of the tariff war remained. Losses for stocks accelerated after the White House clarified that Chinese imports will be tariffed at 145 per cent, and not the 125 per cent rate that Trump had earlier written about, the Associated Press reported.
Markets are especially wary of the inflation report as it offers a picture of the past, and the situation could still worsen due to the effects of the tariffs.
Donald Trump’s tariffs paused for 90 days, but still on for China
Donald Trump on Wednesday announced that he was pausing the sweeping tariff measures he announced on April 2 for most countries for a period of 90 days. The only country that did not get any reprieve was China and its territories of Hong Kong and Macau.
The Republican raised the tariffs announced on China to 125 per cent on Wednesday. On Thursday, however, the White House clarified that the total tariff on China would stand at 145 per cent as the 20 per cent tariffs due to fentanyl are also to be included.
Beijing shot back at the US with 84 percent tariffs on US goods. China also said that it wouldn’t sit back, although it added that it was ready for talks. China also announced restrictions on Hollywood imports as a way to retaliate, although experts believe that the measure would have a minimal impact on the US.