President Donald Trump on Friday ordered U.S. chipmakers and other manufacturers to find alternatives to their operations in China, then later raised existing U.S. tariffs on Chinese goods.
A tweet of the order by the president caused the Dow Jones Industrial Average to plummet by 623 points, about 2.4% down. The Nasdaq dropped by 3%. Apple shares dropped 4.6%.
Shortly after markets closed, the president also raised existing U.S. tariffs on China by 5 percentage points.
He said the United States would raise its tariffs on $250 billion worth of Chinese imports to 30% from the current 25% beginning October 1.
He also announced an increase in the planned tariffs on the remaining $300 billion worth of Chinese goods to 15% from 10%.
The president tweeted about the movement of U.S. companies: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing…your companies HOME and making products in the USA.”
It wasn’t clear what legal authority President Trump holds in making the order, and some pundits said they doubted he had such authority.
President Trump also mentioned again that the U.S. has lost trillions of dollars to China through theft of intellectual property.
His tweet referred to China’s decision to unveil new tariffs on $75 billion in U.S. goods in two cycles on Sept. 1 and Dec. 15. The tariffs range from 5% to 10%. China also said it would impose a 25% tariff on U.S. cars and a 5% tariff on auto parts and components to go into effect Dec. 15.