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News > U.S.

'We Don't Need China', Trump Says as Wall Street Plunges

  • New York Stock Exchange traders shortly after the closing bell in New York, U.S., August 23, 2019.

    New York Stock Exchange traders shortly after the closing bell in New York, U.S., August 23, 2019. | Photo: Reuters

Published 24 August 2019

The impact of his statements was felt among the high-tech companies, gold prices and the dollar value.

Wall Street plunged on Friday after President Donald Trump "ordered" U.S. companies to leave China and look for business alternatives.


'We May Not Do Any Business With Huawei': Trump Says

“We don’t need China and, frankly, would be far better off without them... 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,” Trump tweeted.

"Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE... all deliveries of Fentanyl from China... Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!."

Given the possibility that Trump's trade war will get worse, the NASDAQ Composite, Dow Jones Industrial (DJI) Average and the S&P 500, which are the three major U.S. stock indexes, closed Friday's session sharply lower.

"The latest exchanges in the long-running tariff row triggered a broad-based sell-off that hit shares of companies with high exposure to China the hardest, such as chipmakers and other top technology names," Reuters explained and reported that Intel Corp dropped by 3.9 percent and Apple by 4.6 percent.

Shortly thereafter the Wall Street reaction, Trump blamed Seth Moulton, a Representative (D-MA) who dropped out of the presidential race on Friday, for the financial markets' restlessness.

“The Dow is down 573 points perhaps on the news that Representative Seth Moulton, whoever that may be, has dropped out of the 2020 Presidential Race!,” he tweeted.

Trump's order also altered transnational investors and their perception of the U.S. debt, for the two-year Treasury bonds offered greater returns than the 10-year papers.

What this means is that investors believe the U.S. economy has greater short-term risks, which in turn is seen as a symptom of an upcoming production and employment contraction.

The economic prospects could be even more challenging if one considers that the price of a gold ounce rose to US$1.537 and, simultaneously, the U.S. dollar lost its value with respect to the Euro.


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