US President Donald Trump has further escalated his administration’s trade war against Beijing with a Twitter outburst that ordered American companies to return “home” from China.
Trump’s tweets came just hours after Beijing announced it would apply tariffs to $75bn (£61bn) of US goods in retaliation for levies applied by Washington.
The US President said he would be responding to China’s latest tariffs on US goods this afternoon, in an announcement that sent stock markets firmly into the red.
He tweeted: “Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue.”
“I won’t let that happen! We don’t need China and, frankly, would be far better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP.”
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon.”
US stock markets tumbled following the outburst. The tech-heavy Nasdaq had fallen two per cent by 4.30pm UK time, while the S&P 500 had dropped 1.7 per cent and the Dow Jones industrial average had fallen 1.5 per cent.
In Europe, Germany’s Dax index and France’s CAC 40 had fallen 0.9 per cent, while the pan-European Euronext 100 had shed 0.8 per cent.
Investors who were selling shares bought up safe-haven assets such as bonds. The yield on the 10-year US government bond dropped one basis point (0.1 percentage point) to 1.537 per cent. Yields on 10-year German government bonds fell 3.2 basis points to minus 0.673 per cent.
Trump’s tirade overshadowed what was supposed to be the main economic news of the day, US Federal Reserve Chairman Jay Powell’s speech in Jackson Hole, Wyoming, which occurred at 3pm UK time.
David Cheetham, chief market analyst at online trader XTB, said: “Not long after this Trump embarked on an incredible attack on China via social media with the tone and content of his messages extremely strong even by his own lofty standards.”
“Trump’s remarks have sent shockwaves through the market and dashed any hopes of a de-escalation on the trade front anytime soon.”