Fears of a trade war are growing among United States investors. The worry stems from new tariffs from China. The Chinese government announced a new set of fees on imports from the United States. The tariffs are on pork, apples and other goods. They say the rise in duties is a response to the United States raising taxes on steel and aluminum.
Tension is rising in the United States, Japan, and European countries as they continue to disagree with Chinese trade actions.
According to reports, farming states in the U.S. will be hurt the most by the new tariffs. With extra costs associated with U.S. pork, nuts, and fruits, Chinese buyers could look elsewhere. American exports of farm goods to China totaled over $20 billion in 2017.
Possible Trade War Between U.S. and China
The news is stirring up fear of a trade war, leading to dropping stocks.
NASDAQ futures dropped 0.8 percent before the market opened on Monday, April 2. Technology companies began to fall in premarket trading as well. Companies like Amazon and Facebook slipped during premarket trading.
United States President Donald Trump is readying another tariff, one of over $50 billion. This tax will target Chinese technology, putting pressure on U.S. tech companies.
However, many large United States tech companies are struggling in the stock market.
Amazon fell 1.5 percent following remarks from President Trump. He claims that the company doesn’t pay enough tax and the rates it receives for postal service are unfairly low.
Facebook dropped as well, falling 0.8 percent. The drop is mostly due to the data breaching scandal last month continuing to hurt the company.
Also, Tesla saw a nearly 4 percent decline. The decline follows a recall announcement by the electric car manufacturer. Tesla also had a Model X vehicle crash while in Autopilot mode.
The full effects of the new Chinese tariffs are yet to come. At this point, however, it looks like it could have a significant impact.