Drop in stocks not a result of Trump tweets on tariffs, says conservative strategist

Conservative tax policy expert Mattie Duppler said on Wednesday that falling markets on Tuesday were not the result of President TrumpDonald John Trump5 things to know about Boris Johnson Conservatives erupt in outrage against budget deal Trump says Omar will help him win Minnesota MORE's tweets warning China he is willing to raise tariffs if necessary.

"It's a mistake to say that this is a result of Trump's tweets," Duppler, a senior fellow at the National Taxpayers Union, told Hill.TV's Krystal Ball and Buck Sexton on "Rising." 

Duppler tied the drop on Tuesday to the anticipation that markets would be closed on Wednesday to honor the passing of former President George H.W. Bush.

"Obviously stock markets are closed today as well, so I think there was a little bit of a hedge built in, that's why we saw such as a precipitous drop. We're not used to having markets closed on Wednesday," she said. 

"I will say that I think the market is now taking Trump seriously instead of literally. It took it two years to finally incorporate what the president says is actually what he's going to do," she continued. 

Trump warned China in a tweet on Tuesday that he could raise tariffs if the country did not agree to overhaul its trade practices.

"President Xi and I want this deal to happen, and it probably will. But if not remember, I am a Tariff Man,” Trump said in a series of tweets.

“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,” he continued. “It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.”

The Dow Jones Industrial Average closed down nearly 800 points and the S&P 500 dropped more than 3 percent following the tweets. 

Trump over the weekend had hailed a cease-fire he said had been reached in the trade fight after a meeting with Chinese President Xi Jinping over the weekend in Argentina. But the details of whatever accommodation may have been reached about the deal remain murky.

Trump did say he would not raise tariffs on Chinese imports to 25 percent, which led markets to rise on Monday. But uncertainty over the deal and Trump's "Tariff Man" tweets were widely interpreted as leading to Tuesday's sell-off.

— Julia Manchester