US President Donald Trump has launched a trade war by imposing tariffs on Canada, Mexico, and China. This move has caused Asian markets to tumble, with Hong Kong’s Hang Seng Index down 0.7%, Japan’s Nikkei 225 falling 2.8%, and South Korea’s Kospi dropping 3%. The US dollar has strengthened against other currencies, while the Canadian dollar hit its lowest level since 2003.
The tariffs target key trading partners, with Canada and Mexico set to retaliate with their own tariffs. China has vowed to take “corresponding countermeasures” and challenge Trump’s move at the World Trade Organization. Investors are concerned about a potential trade war that could impact global growth and company earnings.
Trump claims the tariffs will help curb illegal drug trafficking and immigration into the US. However, experts warn that tariffs can have long-term negative effects on economies. Chief investment strategist Charu Chanana notes that repeated use of tariffs can lead to other countries reducing their reliance on the US, weakening its global economic influence.
As tensions escalate, Trump is set to speak with Canadian and Mexican leaders on Monday about the tariffs, which will come into effect Tuesday. The situation remains volatile, with investors bracing for further market volatility.
Source: https://www.bbc.com/news/articles/c70kn4676p4o