Trump, in a statement, said he proposed the additional tariffs "in light of China's unfair retaliation" against earlier U.S. actions that included $50 billion of tariffs on Chinese goods. USA 10-year Treasury yield was last down 2.75 basis points at 2.76 percent, while gold prices went up more than 1 percent.
"The market has vacillated between writing it off as just talk and assuming there could be a serious problem", said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
Briefing.com analyst Patrick O'Hare said investors were disappointed by the lack of reassurances from Trump administration officials, including Mnuchin, who told CNBC that the administration hoped to negotiate but acknowledged that a trade war was a possibility.
The Dow Jones industrial average fell as much as 620 points in afternoon trading Friday, its latest big swing this week.
The Dow fell 588 points, or 2.4 percent, at 23,909.
In regards to backing down in the potential trade war, Mr. Trump said on WABC Radio's, Bernie & Sid in the Morning show, "If I did that, I'm not doing my job".
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"The process itself seems to be quite chaotic", she said.
"We're going to need brand new, bad news on trade for the equity markets to push lower". "The WTO is unfair to U.S". "Today's decline will likely accelerate the pace of testing the indices yearly lows in the coming days", said Peter Cardillo, chief market economist at First Standard Financial in NY. Copper fell 2 cents to $3.06 a pound.
Jason Pride, chief investment officer for Glenmede's private client business, said Trump's latest order caught investors off guard. He noted that the US hasn't entered a full-blown trade war since 1930, and trade relationships were much different back then.
Nixon, of Northern Trust, said businesses also support the idea of making changes in America's trade relationship with China. Even though investors are optimistic about the state of the global economy and company profits continue to grow, Nixon said the administration is creating the thing investors hate the most: uncertainty.
The yield on the 10-year US Treasury note, which has been steadily climbing as investors' inflation expectations rise, dipped to 2.78 percent after the jobs report.