New York (CNN Business) US stocks slumped on Friday after President Donald Trump opened another front in the trade war.
The Dow declined 300 points, or 1.2%, on Friday morning following Trump’s threat to impose tariffs on Mexico. The S&P 500 fell 1.2% and the Nasdaq lost 1.3%
Wall Street was already under heavy pressure in recent weeks due to fears about the escalating trade battle with China.
Trump’s tariff threat on Thursday evening against Mexico, one of America’s largest trading partners, only amplifies investor worries about how trade tensions will disrupt business and slow global economic growth.
“This is just the latest worry to put on the fire for investors,” Ryan Detrick, senior market strategist at LPL Financial, wrote in a note to clients. “The big question at the end of the day though is can we really fight two trade wars at the same time?”
Auto makers, which rely on Mexico as a vital part of their supply chain, retreated. Fiat Chrysler(FCAU) lost 5%, while General Motors (GM) declined 4% and Ford (F) lost 3%.
Trump said the United States will impose a 5% tariff on all Mexican imports starting on June 10, as a punishment for illegal immigrants crossing the Mexican border into the United States. The White House indicated the tariff would increase by increments of 5 percentage points each month until it reaches 25% in October.
Some analysts expressed alarm that Trump is imposing tariffs in response to immigration problems, not economic or trade ones.
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