Before the opening bell, the S&P is down 1.7 percent, with the Dow and the Nasdaq over 2 percent lower. A loss of each percent in American indices means losing billions of dollars in value for corporations.
Even before the announcement, American stocks saw the worst start in April since the Great Depression. The S&P 500 is in a 10-percent correction from its record high in late January.
Comment: Indeed it has, with further details here:
Major US companies' stocks were down across the board with all 30 Dow components trading lower. About 450 of the S&P 500 components were down as well.
On the Nasdaq, major tech companies Apple and the FANG group - Facebook, Amazon, Netflix and Alphabet were down between one percent and four percent.
"It's tit-for-tat as China retaliates, sending the markets in a tailspin. Today's decline will likely accelerate the pace of testing the indices yearly lows in the coming days," said Peter Cardillo, chief market economist at First Standard Financial in New York, as quoted by Reuters.
Gold edged up on the news, trading $10 higher than in the previous session at $1,347 per ounce. The precious metal is traditionally a hedge against stock market volatility.
On Wednesday, the Chinese Finance Ministry said Beijing would hit 106 American products, including soybean, automobiles, and chemicals, with a 25-percent tariff, worth $50 billion. The move came in response to US levies on Chinese goods.
Comment: In China's words:
The Chinese vice-minister of commerce said Beijing is ready for a trade war with the United States, albeit reluctantly, if Washington is looking for a fight.
"China does not want a trade war because no one will emerge as a winner," said Wang Shouwen. "But if someone insists on fighting a trade war, we will be there."
The official stressed that the Chinese authorities are still ready for dialogue and negotiations over balancing trade turnover between the world's two biggest economies.
[...]
The step came in retaliation to the 25 percent tariff on over 1,300 Chinese products introduced by the Trump administration earlier this week. The US list covers machinery, electronics, uranium, flamethrowers and even dental devices.
US President Donald Trump's top trade adviser blamed the markets for not reacting to the "unbelievable" strength of the American leader's economic agenda.
Comment: Trump also had this to Tweet:
Navarro told CNBC that Trump's "singular focus is on economic growth, rising wages and a strong manufacturing and defense industrial base.""If we hit all points... the market will go up."
Another US official, who asked not to be named, told CNBC that "we're focused on long-term fundamentals. We're not really reacting to market fluctuations."
Comment: Unfortunately, years of destructive financial policy and systemic MASS corruption is likely to do little to help the 'long-term fundamentals' at this stage. We are, as many analysts are observing, 'running on empty'.