Fox Business Panel Gloomy as China Imposes 34% Retaliatory Tariffs: ‘Angry Heads Are Prevailing’

The morning Fox Business panel had a grim assessment as China slapped 34 percent retaliatory tariffs on imports of all U.S. products.

The Mornings With Maria panel — with Cheryl Casone filling in for host Maria Bartiromo — included Dennis Gartman, editor and publisher of The Gartman Letter, and Lonski Group president and founder John Lonski.

“Right now, angry heads are prevailing and circumstances are prevailing that send stock prices much lower than they are right now,” Gartman said during the discussion after news of China’s retaliatory tariffs came down.

China’s move came two days after Trump’s “Liberation Day” tariffs on nations across the globe, including an island inhabited only by penguins.

Read the full exchange below:

CHERYL CASONE: I want to bring this up really quick. We export a wide variety of goods to China but some of the key categories here, and this is part of the tariff discussion, agricultural products, machinery, aerospace, semiconductors, mineral, fuels, you have many companies and I think about Apple, I think about Tesla that do sell their products because they want access to that Chinese consumer. This certainly is going to be a hit for American companies that do business in China, John.

JOHN LONSKI: That’s right. The companies either have to go ahead and accept a much lower profit margin, even sell products at a loss, or what they’re going to be facing is a drop in orders from Chinese customers. The retaliation measure taken by China is what worries markets a great deal because this type of retaliation is the early indication of a trade war and a trade war can be very destructive not only the U.S. economy but to the world economy. My sense is that cooler heads will eventually prevail in the Trump administration and elsewhere and at some point the parties will get together and come up with measures that actually will lead to perhaps even a reduction in tariffs to bring an end to this particular trade war. Trump will have no choice, if that S&P 500 goes under 5,000 he’ll perhaps have little choice but to go ahead and make a deal, even though it’s maybe not exactly the type of deal that he wanted to make in the first place.

CASONE: Dennis, how do you feel about that?

DENNIS GARTMAN: Let us hope that cooler heads do indeed prevail. The fact that we put into effect tariffs which are reminiscent of the middle 1930s which took a modest recession and turned it into a substantively worse depression bothers me greatly. Let us hope that cooler heads prevail. I hope John is right. I pray that’s what happens. But I have my doubts at this point whether that will happen or not. Time shall tell.

CASONE: Go ahead, John.

LONSKI: Along these lines, let’s not forget what I’m mentioning is that we have to do even worse in terms of the equity market. We have to see a further decline by equities. It’s going to be damaging to business sentiment, job creation, investment spending before we reach that point where those in power realize they have no choice but to make a deal and bring an end to this nonsense.

CASONE: I want to take a closer look at this. This gives us a broader story of why we’re seeing the market selloff right now substantially and these are top goods imports to the U.S. from China. So this is what we’re taking in from them and this is what – this is the tariff story from Wednesday afternoon and the Rose Garden – cell phones, computers, toys, games, sporting goods, electric parts and apparel. Those are the things that Americans may likely see price hikes on unless some kind of negotiation can happen. The problem here, Dennis Gartman, is that from the news we’re getting from China right now, it doesn’t look like negotiation is on the table. Or this is them coming out swinging and saying that they’re ready to maybe have a discussion. It’s hard to say. This is the CCP and this what is we know right now.

GARTMAN: Let us hope that the cooler heads do prevail. Time shall tell. And eventually the cooler heads will prevail but for right now cooler heads are not prevailing. Right now, angry heads are prevailing and circumstances are prevailing that send stock prices much lower than they are right now.

CASONE: We’ve got the Dow down more than 1,000 points, John. So let me take this to you, the Mag Seven, they lost more than $800 billion in market value yesterday. Trump’s tariffs could impact Apple’s supply chain strategy as it works to diversify manufacturing away from China. The countries affected that Apple was counting on as far as supply chain diversity, India, Japan, South Korea, Taiwan, Vietnam, Malaysia. That’s all upended right now.

The tariffs imposed by China will take effect on April 10, and includes — but won’t be limited to — electronics, sporting goods and clothing.

Watch above via Fox Business.