The U.S. stock market fell again Friday, April 6, with the broadest measure, the S&P 500, falling more than 2%. This followed President Trump’s tweet on Thursday that he would ask for a list of an additional $100 billion in imports from China to put tariffs on, raising the total to more than $150 billion. It was also revealed that there are no negotiations between China and the U.S., raising the likelihood of a full-blown trade war.

Trump fired the opening shot by announcing U.S. tariffs on steel and aluminum on March 8. China replied by announcing tariffs on $3 billion of U.S. goods on April 1. This action was relatively modest as China only provides about 2% of steel imported to the U.S. The next day, Trump escalated the trade fight again by announcing tariffs would be placed on another $50 billion of imports from China. The Trump administration targeted industries that the Chinese government is prioritizing in their modernization effort known as “Made in China 2025.”

China replied on April 4 by announcing its own tariffs on U.S. goods worth about $50 billion. These tariffs targeted U.S. aircraft and soybeans, arousing protests from the farm belt which largely voted for Trump. China’s tariffs did not include large U.S. aircraft and U.S. services, which will allow China to respond to any more escalation by the Trump administration. Calling this tit-for-tat unfair, Trump called for tariffs on another $100 billion of Chinese goods, which China vowed to respond to.

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