The Dow Jones Industrial Average slipped as much as 250 points, or 1%, to 24,950 in mid-day trading, led by multinationals with business in China: Caterpillar (down 3%) and Boeing (down 2.2%). At the same time, the broader S&P 500 dipped half a percentage point to 2,768.

“Today’s U.S. action is generally market negative because investors likely see the US imposing tariffs as increasing somewhat the risk of a full-on trade war, as we do,” wrote Evercore ISI analyst Terry Haines in a Friday note.

On Friday, Trump made good on his tariff threats against China. The president announced plans to impose 25% tariffs on Chinese products, adding duties to $34 billion worth of goods that would go into effect July 6, while another $16 billion in tariffs would be due at a later date. The Chinese government quickly vowed to respond in kind.

“The United States has kept changing its mind and now launched a trade war,” the Chinese Commerce Ministry said in a statement. The wording contrasts with attempts from some U.S. officials such as Trump trade advisor Peter Navarro to use more toned-down vocabulary—with Navarro characterizing the back-and-forth between the two nations as a “trade dispute” instead.

Fearing that China would turn threats into reality by imposing tariffs on U.S. agricultural goods, soybean futures settling in July also fell 1% to a near one-year low of $9.17 Friday.

While Trump has sought to impose tariffs on goods that could complicate China’s attempts to become a leader in the tech space, the Middle Kingdom has been pressuring parts of the U.S. president’s voter base—namely, the farming community. China has previously threatened to place duties on U.S. products including soybeans and beef cows.

Notably, China has also threatened to place tariffs on U.S. aircraft—a move that could be painful to Boeing. Meanwhile, China has been a highly important market to construction machinery maker, Caterpillar, which said that Asia Pacific accounted for about 21.5% of its revenue last year.