President Donald Trump “spooked” Wall Street on Friday, as Barron’s reported, when he started his morning by tweeting that United States companies were “hereby ordered” to start pulling out from doing business with China. The remark was taken by investors as a significant escalation of Trump’s trade war against the Chinese. Earlier in the day, Federal Reserve Chair Jerome Powell had delivered a speech intended to reassure the markets by pledging to “act as appropriate to sustain the expansion” of the U.S. economy.
Trump does not have the authority to “order” U.S. companies to pull out of China, at least not without congressional authority, according to a CNBC report. Nonetheless, the Dow Jones average had plunged 650 points by about 4 p.m. EDT, according to CNBC.
Even as the Dow was taking a dizzying drop, and other markets such as the Nasdaq and S&P 500 also plunged, Trump returned to his Twitter feed to crack what was apparently intended as a joke about the market crisis that his own earlier tweets potentially caused. He also seemingly took a pot shot at a Democratic presidential candidate as well.
“The Dow is down 573 points perhaps on the news that Representative Seth Moulton, whoever that may be, has dropped out of the 2020 Presidential Race!” Trump wrote.
Moulton, a member of Congress from Massachusetts, announced that he was ending his short-lived bid for the Democratic nomination on Friday, as CBS Boston reported.
“I’m glad he thinks I have more influence on the Dow than he does,” Moulton told Washington Post reporter David Weigel, who reported the quote via Twitter.
Other Twitter users noted that Trump’s joke was inappropriate, because as USA Today has reported, Americans with 401(k) plans, or other funds that invest in the stock market, lost thousands of their retirement savings with the massive stock market plunge.
Trump also wrote on Twitter that the United States does not “need” China and “frankly, would be far better off without them.”
But even if Trump had the authority to “order” U.S. businesses to stop trading with China, the divorce appears likely to be far more complicated than Trump portrays it to be. Chinese investors own more U.S. residential real estate than investors from any other country, according to MarketWatch. For the past six years, China has led the world in purchases of U.S. residential real estate.
In addition, China owns $1.1 trillion of the U.S. national debt, according to the business site The Balance. That makes China the single largest foreign holder of U.S. debt, with about 27 percent of all U.S. debt owed to foreign countries.