On Friday, the 31st of May 2019, all three key indexes of Wall St. shed more than 1 percent, while the S&P 500 had winded up the day with its biggest monthly plunge since 2010, after on Thursday (May 30th), US President Donald Trump had shaken the global economy further by threatening to hike tariffs up to 25% on all of Mexican imports over a long-time migrant dispute, fueling fears among the investors that a long-term trade war on multiple fronts could have led multiple economies towards recession including United States.
Washington had threatened to hike Mexico tariff up to 25 percent, unless immigration across Southern Mexico border had been stopped, while Mexican President Andres Manual Lopez Obrador had urged US to back off of its stance.
Aside from that, casting further shadows over the new warfront of Trump’s tariff battle, Mexican Farm Lobbies had asked for a punitive tariff on US agricultural goods, which could result in a painful political blow to US President ahead of his 2020 presidential election, given the extent of votes US farmers had been carrying for the US President Donald Trump.
Nonetheless, citing statistics, S&P shed 1.32 percent to 2,752.06, Dow lost 1.41 percent to 24,815.04, and Nasdaq dropped 1.51 percent to 7,453.15, while cautioning the investors to brace for further downswing momentum, a head of Barings Investment Institute in Boston, Christopher Smart said, “It really is applying a trade tariff to a national security issue and that is different.
That is the issue and now what country is not vulnerable to tariffs or what political, diplomatic or national security issue won’t now include the threat of tariffs to resolve. So, if you are an investor this is a significantly different world”.