Stocks Plunge as China Retaliates
Early this morning, China responded severely to last week’s announcement that the U.S. would slap additional tariffs on $300 billion of Chinese imported goods by instructing state-owned companies to cease all purchases of U.S. farm products. This is another major escalation in what is fast becoming a full-blown trade war. In addition, the People's Bank of China allowed the yuan to fall to its weakest level since early December. To a degree, this action will mitigate some of the impact from tariffs already implemented by the United States. President Trump has not responded as of this writing. At this point, the U.S. has either employed or targeted nearly all goods imported from China, meaning the next likely response by the U.S. would be another increase in the tariff rate.