Escalating Trade War Sparks Fear for Wall Street, US Consumers
Wall Street jitters marked Tuesday’s start as the Dow Jones industrial average opened more than 300 points lower than Monday’s close.
The drop comes after President Donald Trump announced a trade tariff on $200 billion worth of Chinese goods, adding to the original tariff on $50 billion worth of goods.
The escalating dispute between the two countries should worry business owners in America, said Edward Stuart, emeritus professor of economics at Northeastern Illinois University.
“It’s going to disrupt the production of every company in the U.S., which isn’t just every big company,” he said. “It’s even the relatively small companies.”
That’s because production takes place across the globe, and a lot of that production happens in China, he said.
But Mike Miller, an associate professor of economics at DePaul University, disagrees.
“We have to understand that trade is a relatively small part of the American economy,” he said. “The amount of trade which is being affected by the tariffs is probably – in terms of the total global trade of the United States – 1-2 percent.”
“So that means even if we impose these tariffs, the effects upon gross domestic products will be minimal in the short run,” Miller said.
Stuart and Miller join Eddie Arruza to discuss how the trade war may affect Americans’ pocketbooks.