US President Donald Trump has imposed tariffs on Mexico, Canada, and China, sparking a sharp sell-off in global markets. Stock markets in Asia plummeted, with Japan’s Nikkei 225 index and South Korea’s Kospi falling over 2.5%. The Taiwan Stock Exchange also declined more than 3% as investors assess the potential fallout from a possible trade war.
Japanese auto manufacturers Toyota Motor and Nissan Motor fell about 5%, while semiconductor giant Taiwan Semiconductor Manufacturing Company dropped over 5%. President Trump had promised tariffs on Canadian and Mexican goods, except for energy products, which will be levied at 10%.
The US dollar strengthened as the peso and Canadian dollar declined. Canada and Mexico have vowed to retaliate with their own tariffs on US goods. This has heightened fears of a full-scale tariff war, sparking concerns about inflationary pressure returning to the economy.
“The rising trade policy uncertainty will heighten financial market volatility and strain the private sector,” said Gregory Daco, chief economist for EY-Parthenon. China’s initial reaction was cautious, with the Ministry of Commerce stating it would challenge the tariffs at the World Trade Organization.
Source: https://www.nytimes.com/2025/02/02/business/stocks-trump-tariffs.html