Dow closes down more than 700 points

The Dow was down more than 700 points at closing on Monday amid an escalating trade war with China.
4:49 | 08/05/19

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Transcript for Dow closes down more than 700 points
This is an ABC news special report. Tom governments. And good afternoon we are following breaking news from Wall Street we're just moments away from the close of the market. At one point today the Dow down more than 900 points right now about 760. The worst day for trading so far this year the trade war between the US and China entering a new face. The president's tweet last week that he was threatening tariffs about 300. Billion dollars of Chinese goods. We'll China responded today by allow its currency dropped to its lowest levels against the dollar in more than a decade. Wall also threaten attacks agricultural goods from the US or bring in Rebecca Jarvis right now she's been following all the developments from Wall Street and Rebecca what a day for traders. What a day for traders what a day for people's retirement savings their 401 k's we see the Dow down now 749. Points. And at the heart of this is the fact that this trade war is becoming so real you have companies in the U west trying to depend on. What's going to happen next for their business and happy. Taking taking place between the US and China right now a matter of who blinks first and more and more investors on Wall Street. Believe that the United States is walking itself into a quarter here in that China. Which has as you said at the beginning has a great amount of resolve here they're willing to devalue their currency the are willing. To slap tariffs on agricultural goods from US farmers. That China won't blink here and the question is what is the US next move especially. When now without additional tariffs on 300 billion dollars worth of goods coming here to the United States. Those are goods that US companies rely on those are goods that US consumers relying on an all of a sudden it means that cost it more expensive for consumers. So if you look at for example that cell phone how much does back open costs with these new tariffs. Potentially as much as seventy dollars that new laptop a 120 dollars and these aren't just electronics. Their toy is. They are baby necessities. The air gains they're clothing their shoes we still in court as a country a great amount of things from try it out one of those products that was hurt today by some of this back and forth you mentioned the game of chicken but we have. Have seen this before people's 401 k.s are on the line we have an election coming up. Does this time this this back and forth today you'll difference where you can imagine that China is batting on that you can imagine on the fact that China has nothing but time but the United States does have this election ahead. And they are counting on the fact that the US may very well blink as a result of that election especially as this ripples through the real economy because you're seeing the stock market impact right now. But this also has the effect on jobs when prices go up or companies have to absorb higher cost. That's when they start looking at their head counts and that's the issue ahead do they start saying we can't afford to do business like this and laying people off. Allowing its the White House but Rebecca one last question put this into perspective it's still been a very good year for the stock mark at this moment in time Dow Jones Industrial Average still up about 10% for the year. OK Rebecca Jarvis fresh Rebecca thanks so much on what the White House no cure Phillips is there outside the White House for a sitting cure you actually get a chance to speak with the president. About his relationship with China last week. I did it it's interesting I think Rebecca Jarvis nailed it it is a game a chicken because last Thursday when I asked him about this all out trade war and I asked him what do you say to consumers and small business owners. His quote was if they don't want to trade with us talking about China anymore that would be fine with me it would save a lot of money. Eddie also went on to tell me that he and she have a great relationship it's just that he's not moving fast enough. So clearly we are seen this back and forth last Thursday the markets dropped 300 immediately when he announced those tariffs look at the numbers today. And the president you know as he talks about the fact that this will not hurt us here in the US that's actually falls those are false claims. US consumers will pay for those terrorists as Rebecca pointed out. In the tariffs are taxed our taxes on all imported goods that we get from China so we will see it increase immediately. So while China threatened to take countermeasures we are seeing that now the president saying they have a good relationship the question now is the long term of sexier will there be a trade deal the president now saying that may not even happen until after the when he when he elections on. Yet I quote good relationship being put to the test right now cure field throws cure thank you for that we will have much more on world news tonight and always at And are at it you're just tuning in the worst the of trading so for the shoot 2019. The Dow closing around 767. Points we will have much more throughout the day on top Galveston York figure for watched. This has been a special report from Levy's.

This transcript has been automatically generated and may not be 100% accurate.

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