UPDATE: Dow plunges 473 points as trade tensions increase

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UPDATE: At the end of the trading day and the DJIA was at -473.39 while the S&P fell 1.65%.

ORIGINAL STORY: Stocks fell sharply on Tuesday as trade tensions between the United States and China are spooking the financial maket.

The Dow Jones Industrial Average traded 599.85 points lower while the S&P 500 fell 2.19% (around 3:20 PM). All 30 of Dow components fell and all 11 S&P sectors traded lower in the broad sell-off.

U.S. Trade Representative Robert Lighthizer told reporters that the U.S. will increase levies on Chinese imports on Friday.

Chinese officials are heading to Washington to try to salvage negotiations aimed at breaking an impasse between the world’s two biggest economies over Beijing’s aggressive push to challenge American technological dominance. The 11th round of talks is set to start Thursday in Washington.

“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump tweeted.

Traders were dissapointed with President Donald Trump’s weekend tweet threat which many saw as just a negotiation tactic.

The United States accuses China of resorting to predatory tactics in a drive to give Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles.

Both countries have an incentive to reach a deal. China’s economy is decelerating; the International Monetary Fund expects Chinese economic growth to slip from 6.6% last year to 6.3% in 2019 and 6.1% in 2020. The trade war with the United States has hurt Chinese exporters and eroded business and consumer confidence.

The trade tensions have also rattled financial markets, jeopardizing a U.S. stock market rally that Trump sees as a vote of confidence in his economic policies. And China’s retaliatory tariffs are inflicting pain on farmers, a key part of Trump’s political base.

Forecasters at the IMF and World Bank have already downgraded the outlook for the global economy. The U.S.-China standoff is reducing global trade and creating uncertainty for companies deciding where to buy supplies, build plants and make investments.

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