Transcript for Wall Street on alert as markets continue to fall amid fears of trade war

Now to the major political headlines of the morning and we start with fears of a trade war with China that are abused and Havoc on the stock market with China saying it will match America's proposed terrorist president trump is saying things may get worse before they get better ABC's terror pulmonary. Is in Washington would Mora terror good morning to you. Good morning dead and Paula that's right the markets were hanging on Trump's and each week Wall Street and even some of the president's closest aides have been trying to figure out if these threats are just as tough negotiating style or real policy. Markets around the world tumbling after president trans. High stakes standoff with China the Dow dropping by more than 550 points as president trump and Chinese president she engaged in a tip for attack over tariffs. I'm not saying there won't be a little pain. But the market's gone up 40% 42% so we might lose a little bit other. I'm selling short term paint it'll long term gain a more balanced trade relationship with China. I'm igniting a potential trade worth one of the world's largest economies when he announced fifty billion dollars in tariffs on Chinese goods this is a big switch from back in September. President she and I discussed improving our economic. Relationship. We want a vibrant trade. Relationship with China. Beijing quickly retaliated with fifty billion dollars in tariffs on US goods hitting American manufacturers and farmers in. In Iowa this corn and soy farmer told ABC's Martha Raddatz he's hopeful that chomping she will reach a deal before the terrorists go into a fact certainly with. Terrorists that have been proposed admitted it could mean you know could mean some lower interest Alison losses but. But it can meet its money certainly could be used her certainly will be helpful. Not backing down trump now threatening China with a hundred billion dollars more in terrorists to present. Think the trade wars are easy to wins that still has view. I think the president feels like if he is in charge those negotiations absolutely his economic advisors seeking to lower the heat we're not running a trade war tonight. It's happened. That he's been executed. But admitting it there is the potential of a trite word Wall Street and main street on edge if these policies. Word to take a fact the retaliation at what weight does it end. Now Beijing has signaled it's unlikely to crumble under pressure a spokesperson for Chinese minute trip congress said they're prepared to get back quote. Forcefully and without hesitation. Dan Paula. Terry thank you ask US the right question in the beginning is this bluster or real policy move got some time to see if that's. What the side of the fence we're on here Tara thanking our program know you sell that video Martha Raddatz with farmers in the midwest she had much more on that tomorrow morning. On this week.

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