- The Washington Times - Monday, August 5, 2019

Stocks tumbled Monday after President Trump’s trade dispute with China accelerated and the yuan sunk to its lowest value in a decade versus the dollar, leaving investors skittish about the relationship between the world’s two biggest economies.

The Dow Jones Industrial Average closed 767 points down for the day, marking the worst day this year and the sixth worst point drop in history. Things were even more grim at one point just after 3 p.m., when the Dow was down 961 points.

Markets elsewhere across the globe also tumbled on news that China’s yuan sank to more than seven per dollar, in a move the central bank in Beijing said was tied to Mr. Trump’s new tariff threats late last week.

From Reuters: China’s Commerce Ministry said on Tuesday that Chinese companies have stopped buying U.S. agricultural products, and that China will not rule out imposing import tariffs on U.S. farm products that were bought after Aug. 3.

The president accused China of manipulating its currency in order to escape the effects of his tariffs, and Mr. Trump pleaded with the U.S. Federal Reserve to counter China’s moves.

China dropped the price of their currency to an almost a historic low. It’s called ‘currency manipulation.’ Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!” the president said on Twitter before the markets opened.

As the Dow began to tumble, the president went back to Twitter, vowing to hold firm against what he called “historic currency manipulation.”

Economists said China isn’t devaluing, but rather it stopped propping up its currency, which they said was the rational move as the trade relations deteriorate.

Things appeared to get worse Monday afternoon as China “suspended” purchase of U.S. agricultural products, breaking a deal Beijing officials had made as a show of good faith during trade talks.

China’s Commerce Ministry also suggested it may impose its own tariffs on some U.S. goods.

Tensions have heightened over the last week, since talks in Shanghai.

Top U.S. negotiators returned from those talks saying the meeting was “constructive.”

But on Thursday Mr. Trump announced a new 10% tariff on $300 billion worth of Chinese imports, slated to begin Sept. 1. He said President Xi Jinping was “not going fast enough” to ink the deal. Mr. Trump also lashed out at Mr. Xi over over matters, saying the Chinese government hadn’t lived up to its promise to curtail the flow of fentanyl, a synthetic opioid fueling the drug epidemic in the U.S., nor has China stepped up purchase of American agriculture products, as promised.

The new tariffs are on top of ones Mr. Trump previously announced on $250 billion of Chinese imports.

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