US President Donald Trump’s imposition of 25% tariffs on Canada, Mexico, and 10% on China has triggered fears of a broad trade war and hit global growth. Asian stock markets slumped on Monday, with the Nikkei share average tumbling 2.3%, while US equity futures pointed sharply lower.
The US dollar surged to a record high against the Chinese yuan and its highest since 2003 against Canada’s currency. However, stocks in Hong Kong fell 1.9% after a Lunar New Year holiday.
Canada and Mexico immediately vowed retaliatory measures, and China said it would challenge Trump’s levies at the World Trade Organization. Barclays strategists estimate that the tariffs could create a 2.8% drag on S&P 500 company earnings.
Global markets are bracing for a potential trade war, with US two-year Treasury yields rising as much as 3.6 basis points to 4.274%. Oil prices rose, driven by concerns about US inflation and interest-rate cuts.
Source: https://www.reuters.com/markets/global-markets-wrapup-1pixtv-2025-02-03