NEW YORK, Aug. 23 (Xinhua) -- U.S. Stocks closed sharply lower on Friday after China announced its countermeasures against U.S. tariffs.
The Dow Jones Industrial Average was down 623.34 points, or 2.37 percent, to 25,628.90. The S&P 500 was down 75.84 points, or 2.59 percent, to 2,847.11. The Nasdaq Composite Index decreased 239.62 points, or 3 percent, to 7,751.77.
China will impose additional tariffs on U.S. imports worth about 75 billion U.S. dollars in response to the newly announced U.S. tariff hikes on Chinese goods, the Customs Tariff Commission of the State Council announced Friday.
Based on laws and approved by the State Council, a total of 5,078 U.S. products will be subject to additional tariffs of 10 percent or 5 percent.
The tariff hikes will be implemented in two batches and take effect at 12:01 p.m. Beijing time on Sept. 1 and at 12:01 p.m. on Dec. 15, respectively, the commission said in a statement.
China's imposition of additional tariffs is a forced response to U.S. unilateralism and trade protectionism, the commission said.
The U.S. government announced on Aug. 15 that it will impose additional tariffs of 10 percent on Chinese goods worth about 300 billion U.S. dollars, effective on Sept. 1 and Dec. 15, respectively, in two batches.
The news came at a time when the U.S. market has already been worrying about a possible economic recession contributed by trade tensions between the United States and its major trading partners.
Federal Reserve Chairman Jerome Powell delivered a much anticipated speech on Friday at the central bank's annual economic symposium in Jackson Hole, Wyoming.
Contrary to what the market had hoped, Powell did not give clear signal about further interest rate cuts. He pledged to "act as appropriate to sustain the expansion," a phrase that he has used for several times in recent months.
While Powell noted that U.S. economy has continued to perform well overall, he pointed out three factors that are weighing on the favorable outlook, namely slowing global growth, trade policy uncertainty, and muted inflation.
He said the global growth outlook has been deteriorating since the middle of last year. Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States.
Powell talked at length about trade policy uncertainties. He said fitting trade policy uncertainty into the Fed's policy framework is a new challenge.
He said anything that affects the outlook for employment and inflation could also affect the appropriate stance of monetary policy, and that could include uncertainty about trade policy.
Brian Rose, senior Americas economist at UBS Global Wealth Management, said the speech was balanced, reflecting the varied views of Federal Open Market Committee members.
"The speech contained no big surprises and market reaction has been limited," said Rose.
Market expectations for another rate cut in September are at 100 percent, according to the Chicago Mercantile Exchange Group's FedWatch tool.
