US tariffs on Mexico, Canada, and China have sparked fears of a global trade war, causing Asian markets to tumble. Taiwan’s Taiex fell 4.4%, with TSMC leading the drop due to its semiconductor exposure. Japan’s Topix index also declined as much as 2.3%. Australia’s ASX 200 retreated over 2% from a record high, while Hong Kong’s Hang Seng index dropped 0.9%.
The US dollar surged against Asian currencies, reaching a record high against the Chinese yuan and a 10-year high against Mexico’s peso. European futures plummeted as much as 3.4%, with the euro sliding 2.3% to $1.0125.
The Trump administration has imposed 25% tariffs on Canada and Mexico, except for Canadian energy, and 10% tariffs on China. This move has sparked retaliation from all three countries. China plans to file a lawsuit against the tariffs, while Canada is targeting US products with a 25% retaliatory tariff. Mexico’s president vowed to implement retaliatory measures but emphasized avoiding confrontation.
Global trade experts warn of a destructive global trade war that could drive inflation surges in the US. Analysts estimate that US tariffs could result in a 2.8% drag on S&P 500 company earnings, including the impact of retaliatory measures from targeted countries.
Source: https://www.theguardian.com/business/2025/feb/03/asian-sharemarkets-tumble-in-response-to-trump-tariffs