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Dow drops 250 points on Trump's tariffs

Wall Street's trade war fears are back.President Trump's move to impose tariffs on steel and aluminum from Can...

Posted: Jun 1, 2018 5:19 AM
Updated: Jun 1, 2018 5:19 AM

Wall Street's trade war fears are back.

President Trump's move to impose tariffs on steel and aluminum from Canada, Mexico and the European Union drove the Dow down 252 points on Thursday, or 1%. The S&P 500 and the Nasdaq lost 0.7% and 0.2% respectively.

Trump is placing a 25% tariff on imported steel and 10% on imported aluminum. The tariffs will go into effect at midnight.

Investors worry that trade restrictions will raise costs and dent profits for companies that rely on the materials to produce their goods.

Wall Street is also on edge about retaliation.

Stocks plunged after Canadian Prime Minister Justin Trudeau announced steel and aluminum tariffs against the United States. Europe and Mexico also announced plans for countermeasures.

In addition, the Trump administration is pushing ahead with plans for tariffs on $50 billion worth of Chinese goods as punishment for intellectual property theft.

"Uncertainty surrounding tariffs on Chinese imports is a source of concern for some retailers that have operations overseas or use imported goods," the Federal Reserve Bank of Cleveland said in a report on Wednesday.

The stock market is having a turbulent week. The Dow lost nearly 400 points on Tuesday on fears that political turmoil in Italy could bring chaos in the eurozone. It made up almost all of that loss on Wednesday.

On Thursday, 29 out of 30 companies on the Dow lost ground.

Caterpillar was the worst performer, shedding 2%. Caterpillar executive Amy Campbell warned in March that tariffs would be a "negative" for selling the company's construction and mining equipment overseas.

Banks also struggled. Goldman Sachs and JPMorgan Chase fell as investors sought a haven in the bond market. The yield on the 10-year US Treasury dropped slightly to 2.82%. Lower yields make it more difficult for banks to make money from loan interest.

At the same time, steel and aluminum stocks spiked. The tariffs are designed to make US companies' production more competitive against foreign steel.

Webco, a steel tubing manufacturer, led the charge Thursday, surging 6%. US Steel jumped 2%. Nucor, the largest American steel maker, also inched up. Aluminum producer Century Aluminum moved ahead 2%.

Full tariffs are the "best case outcome" for American steel and aluminum producers, said Moody's analyst Michael Corelli.

Canada, Mexico and the EU made up 50% of US steel imports in 2017, according to the Peterson Institute for International Economics.

The possibility of tariffs, a healthy economy and higher oil prices have pushed up steel prices 35% since the beginning of the year.

Companies rushed to squeeze in overseas steel before any trade barriers took effect, but imports slowed in May. Corelli expects the tariffs to curb demand from overseas in the coming months. He cautioned that American companies can't completely replace lost foreign production.

"There will still be imports that will be needed," he said.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 86722

Reported Deaths: 1994
CountyConfirmedDeaths
Hennepin25264915
Ramsey10267314
Dakota6942124
Anoka5531131
Stearns362923
Washington345955
Scott232532
Olmsted223726
Nobles191416
Blue Earth15406
Wright14777
Carver13037
Rice12798
Mower12534
St. Louis123329
Clay119940
Sherburne105013
Kandiyohi9082
Winona72718
Lyon6244
Steele5062
Freeborn4903
Nicollet48716
Watonwan4844
Benton4793
Todd4722
Le Sueur4403
McLeod4332
Chisago4151
Waseca4118
Crow Wing40218
Otter Tail3674
Beltrami3624
Goodhue3179
Martin2809
Polk2574
Itasca25513
Becker2352
Carlton2261
Isanti2210
Douglas2191
Cottonwood2130
Pipestone2059
Pine1980
Morrison1841
Chippewa1821
Dodge1820
Sibley1663
Wabasha1640
Brown1582
Unassigned15752
Meeker1552
Murray1492
Yellow Medicine1421
Rock1390
Mille Lacs1333
Faribault1290
Cass1203
Jackson1201
Renville1176
Pennington1071
Houston1050
Roseau1050
Swift991
Fillmore980
Koochiching983
Kanabec958
Lincoln930
Redwood910
Stevens911
Pope810
Aitkin691
Hubbard650
Big Stone640
Wadena610
Grant574
Wilkin553
Norman510
Lake480
Marshall481
Mahnomen441
Red Lake370
Lac qui Parle360
Traverse290
Clearwater240
Lake of the Woods201
Kittson130
Cook60

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 76924

Reported Deaths: 1241
CountyConfirmedDeaths
Polk14988255
Johnson490727
Woodbury475459
Black Hawk425184
Linn3640102
Story321417
Dallas263238
Scott261427
Dubuque251840
Buena Vista191812
Pottawattamie189437
Marshall175234
Sioux12243
Wapello122057
Webster117914
Muscatine105152
Clinton102418
Cerro Gordo97721
Plymouth97520
Crawford9444
Warren9186
Jasper72032
Des Moines7137
Marion6874
Tama67830
Carroll6085
Lee5727
Wright5491
Henry5104
Dickinson4666
Bremer4497
Boone4346
Washington41411
Louisa41314
Franklin33017
Hamilton3123
Mahaska30919
Delaware3053
Jackson2803
Floyd2793
Winneshiek2745
Clay2663
Hardin2661
Benton2611
Clarke2533
Butler2512
Winnebago24711
Emmet24210
Shelby2381
Allamakee2355
Jones2313
Poweshiek2308
Clayton2243
Lyon2233
Buchanan2181
Cedar2101
Guthrie2095
Chickasaw1970
Kossuth1950
Grundy1932
Madison1922
Howard1764
Sac1760
Fayette1751
Iowa1741
Cherokee1732
Mitchell1720
Hancock1702
Humboldt1682
Harrison1642
Calhoun1612
Mills1541
Pocahontas1492
Palo Alto1480
Monroe1409
Page1400
Jefferson1291
Lucas1296
Cass1262
Monona1251
Taylor1171
Appanoose1163
Osceola1130
Union1123
Davis1104
Van Buren1081
Worth990
Keokuk841
Montgomery845
Greene790
Ida770
Wayne762
Fremont730
Adair591
Decatur580
Audubon501
Ringgold402
Adams270
Unassigned160
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