President Donald Trump’s announcement of new China tariffs on Thursday sent the Dow Jones plummeting more than 700 points. The tariffs caused investors to fear that a trade war between China and the United States was in the offing. Companies that rely on foreign trade for the most of their operations were the biggest losers with Microsoft, Caterpillar, and Boeing all deteriorating steeply.

The Dow fell more than 720, or 2.8 percent, to end the day at 23,957 points. The S&P 500 was down 68 points, or 2.5 percent, to close at 2,643, wiping away all its 2018 gains. The Nasdaq stock market sank 2.4 percent, or 178 points, to end Thursday’s trading at 7,166. The Dow Jones Industrial Average performance was the worst since last month, and the fifth-worst in its history.

The President triggered fears of a trade war after slapping China with $50 billion tariffs for “intellectual property theft.” As soon as news of the tariffs was out, the Dow was sent to immediate turmoil, plunging more than 700 points. While signing the tariffs at a White House ceremony, the President said they could hit $60 billion if China fails to end “years of stealing America’s intellectual property”.  

Nonetheless, the markets had already been down following fears that Facebook and several other social media stocks could be affected by tighter regulations following the Cambridge Analytica scandal. But Trump’s order sank the markets even further, especially after he added that the tariffs could go further up to $60 billion.

The tariffs are targeted towards sensitive Chinese tech companies that his administration sees as threats to the American economy. Trump’s latest order also follows a similar one he signed last month that focused on aluminum and steel imports. Wall Street is worried that the President’s protectionist trade policy could face retaliation from major trading partners, and ignite a trade war contribute that could bring inflation to the economy.

However, the tariffs will only be implemented after a consultation window that allows China to respond. The consultation window gives Congress and industry lobbyists an opportunity to revise a list of about 1,300 products that are set to be targeted by the tariffs. The window also minimizes the risk of instantaneous revenge from China.

Beijing has already responded through a statement on the website of its Commerce Ministry. The statement read that the China would not sit and watch its legitimate rights get hurt. It has threatened to take every necessary measure to defend its economy. During the signing of the new order at the White House, the President struck a conciliatory remarks saying that China is a “friend” of the United States and he has “a lot of respect” for the country’s leader Xi Jinping.