Trump declared "I am a Tariff Man" in a tweet Tuesday, threatening to put more duties on China if the trade negotiations fail.
"Equities plunged on" Trump's tweet, "highlighting a tough stance on tariffs," Citi equity analysts said in a note to investors titled "Sing us a song, you're the tariff man." His statements gave investors little hope that progress had been made on trade negotiations.
The Dow dropped about 800 points on Tuesday in the biggest daily decline since Oct. 10, the last big market rout.
"Confusion reigned with respect to Sino-American trade relations days after the Xi-Trump dinner in Buenos Aires. While the initial 'deal' of deferring an escalation of duties was perceived as a positive development, the President's self-description of being a Tariff Man sent a shudder through financial markets," Citi said.
Trump's administration backpedaled on automotive tariffs in particular. Automakers have been hit hard by the trade war. Volvo is one of several companies beginning to consider moving auto production and jobs overseas. Trump said Sunday that China "agreed to reduce and remove tariffs on cars coming into China from the U.S." The White House acknowledged Tuesday that there actually was not a deal in place to reduce or remove tariffs on autos.