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Trump’s “Tariff Man” Comment Proves Kryptonite for Apparel Stocks

U.S. retail and apparel stocks took big hits on Tuesday as comments from President Trump and further analysis of U.S.-China trade talks left investors in uncertain territory.

The Dow Jones Industrials tumbled 3.1 percent, or 799.36 points, nearing the lowest levels of the session. The S&P 500 fell 3.24 percent, or 90.31 points, as of market close, while the Nasdaq declined 3.8 percent, or 283.08 points.

After what was declared as a truce in the trade war between the world’s two largest economies over the weekend, President Donald Trump on Tuesday seemed to torpedo the effort, tweeting that he was “Tariff Man.”

“President Xi [Jinping] and I want this deal to happen, and it probably will,” Trump said on Twitter. “But if not remember, I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so.”

On Saturday, the two leaders said they had agreed to a 90-day pause to try to negotiate their way out of the U.S.-announced step-up in tariff rates to 25 percent from 10 percent. The trade war has seen the two countries trade tariffs on a range of goods and U.S importers have significantly shifted their apparel production out of China to limit risk and costs. However, experts feel retail price increases are inevitable, and this is likely is causing some flight from investors.

While both sides said they had a “highly successful meeting” in Buenos Aires, the U.S. and China put out separate statements, rather than a joint one, to discuss the outcome. Since then, the Trump administration and Chinese government have given conflicting reports over the specific terms agreed upon at the G20 summit. This has caused concern that a deal really isn’t in the works and for the apparel industry, an escalation is likely to hit home, raising tariffs and therefore costs on key product categories.

Among major retailers, Amazon’s stock fell 5.87 percent for the day to close at 1,668.40, Macy’s stock dropped 5.62 percent to finish the day at 32.42, J.C. Penney’s stock declined 5.56 percent to close at 1.36, Kohl’s shares fell 4.59 percent, Walmart’s shares lost 2.98 percent fall to 95.81, and Target Corp’s shares lost 4.19 percent to close at 69.31.

Among publicly trade apparel companies, VF Corp. stock fell 3.24 percent to 80.34 on the day, PVH Corp.’s shares declined 6.09 percent to 107.29, G-III Apparel Group shares tumbled 6.71 percent to 40.76 percent and Ralph Lauren stock dropped 4.41 percent to 109.87.