Markets fall as China downplays chance of trade deal

U.S. markets fell Friday morning on comments from Chinese officials indicating that a trade deal was still far off.

The Dow Jones Industrial Average dipped 130 points in early trading, or about 0.51 percent, while the S&P 500 lost 16 points, or around 0.56 percent.

{mosads}Chinese state-run news agency Xinhua carried comments from Chinese Commerce Ministry spokesman Gao Feng blasting “bullying behavior by the United States,” a reference to President Trump’s decision last week to increase tariffs on $200 billion of Chinese imports.  

“It is regrettable that the U.S. side unilaterally escalated trade disputes, which resulted in severe negotiating setbacks,” Gao said.

Gao also said China would respond in kind to further tariff increases.

Commentary run by the People’s Daily, a mouthpiece for the Communist Party, said there was no point in continuing talks unless the U.S. made strides to show its sincerity, according to Bloomberg.

China has already announced plans to increase tariffs on $60 billion of American imports on June 1 and has indicated that it would respond in kind should Trump decide to move ahead with another round of tariffs on $300 billion of Chinese imports.

Trump has played down the impact of the trade war on the U.S. economy, which has continued to grow at a healthy pace. Economists have shown that U.S. consumers bear the brunt of the costs of U.S. tariffs, while exporters feel the pinch from China’s countermeasures.