Stocks tumbled Friday toward their worst week of 2019, as investors fretted over an escalating trade war with China.
The Dow Jones industrial average slid 334.18 points to 26,249.22 at its lowest point Friday after China vowed to retaliate over threatened US tariffs on another $300 billion worth of Chinese goods.
“We don’t want to fight, but we aren’t afraid to,” a spokeswoman for China’s foreign minister said. “If America does pass these tariffs then China will have to take the necessary countermeasures to protect the country’s core and fundamental interests.”
The S&P closed down 0.7%, marking its worst week this year. The Dow Jones industrial average capped off its second worst week of 2019 after recovering somewhat to close down 98.41 points, or 0.4%,
China’s backlash follows several weeks of trade talks between the two countries that resulted in little breakthrough. The truce was broken Thursday when President Trump, who has been concerned about China stealing US technology, tweeted that he plans to impose a 10% tax on another $300 billion worth of Chinese goods.
Analysts say the threatened round of tariffs would hit US consumers hard because it would tax the remaining $300 billion in Chinese imports that are currently tariff free.
“Total tariffs on Chinese imports could cost the average family about $1,500 per year — effectively a tax on consumers that will slow the economy,” said Dan North, chief economist at Euler Hermes North America.
Shares of iPhone maker Apple fell 2.2% to $203.90 as analysts warned that the tech giant, which assembles its iPhones in China, would be vulnerable to a price increase.