Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
President Trump holds up a signed presidential memorandum aimed at what he calls Chinese economic aggression. Photo: Mark Wilson/Getty Images
The plot has thickened and the characters have developed as President Trump announced plans to re-engage 2018's tariff battle with China.
By the numbers: Chinese stocks fell more than 6% at one point, Dow futures dropped more than 500 points and the Chinese yuan weakened significantly after Trump sent 2 tweets yesterday threatening more U.S. tariffs on imported Chinese goods.
Behind the scenes: A source familiar with the situation tells Axios' Jonathan Swan the Chinese have been backing off of agreements the U.S. negotiating team believed they had already made. Trump's view, the source said, is that he's negotiating from a position of economic strength, especially with April's strong U.S. jobs numbers.
Flashback: We've seen this movie before. In late March 2018 the Dow fell more than 1100 points in just 2 days, after Trump ramped up trade war rhetoric and announced another round of tariffs on China.
Why it matters: The stock market has had one of its best starts to a year in almost a decade, but the run has been based on traders pricing in a resolution to the trade war and no further tariffs. It's one of the many positive assumptions the market has been making all year.
Reality check: China is in a much more advantageous position this time around. Its government added stimulus that has seemingly stabilized the economy, its stock market is the world's top performer so far this year and its central bank has ample room to cut rates.
- The editor-in-chief of China's state-owned Global Times tweeted: "President Trump threatens China while he seemingly doesn't understand how tariffs work. ... China has long ago prepared for the worst. We won't buy this trick. Moreover, he didn't even scare North Korea."
Trump also is facing pressure from U.S. businesses who aren't eager to relive the uncertainty of last year's tit-for-tat drama.
- "Tariffs are taxes paid by American businesses and consumers, not by China," National Retail Federation senior vice president for government relations David French said in a statement.
- "A sudden tariff increase with less than a week's notice would severely disrupt U.S. businesses, especially small companies that have limited resources to mitigate the impact. If the administration follows through on this threat, American consumers will face higher prices and U.S. jobs will be lost."
Flashback: Grading the impact of Trump's China tariffs