Asian markets dive as Trump kicks off trade war

As the US prepares to impose trade tariffs, Asian stock markets have fallen in response to concerns about a global trade war.

After US President Donald Trump confirmed he would impose severe tariffs on Canada, China, and Mexico, the indexes dropped by about 2% as they opened on Monday.

The mainland China market was shut for Lunar New Year holidays, but its currency, the yuan, dropped 0.4 percent to the dollar.

The US tariffs, set to go into effect on Tuesday, impose a 25 percent tax on all imports from Canada – except for energy – and Mexico, as well as a 10 percent levy on goods from China.

Full impact not “fully understood.”

Some of the world’s largest manufacturers are likely to have to deal with the dramatic trade change that Trump has welcomed as a result of weakening demand from the world’s top economy and a decline in global growth.

The hardest hit automakers were the majority of those who had operations there and exported to the US, many of them. Toyota, the world’s top automaker, and smaller rival Nissan fell more than 5 percent. South Korea’s Kia Motors, which has a factory in Mexico, tumbled more than 7 percent.

Foxconn, Quanta, and Inventec all experienced declines, with Inventec, Inventec, and other Taiwanese tech companies all experiencing declines.

As responses from affected nations are developed, I don’t think market participants have fully understood the potential fallout, especially with market participants’ responses, according to Tareck Horchani, head of prime brokerage dealing at Singapore’s Maybank Securities.

The suffering is unlikely to be felt by US markets. US stock futures dropped by more than 2% before Monday morning’s market started. and analysts warned of potential global price increases for goods.

Canada, one of the US’s top trading partners, announced its own tariffs on the US, with 25 percent taxes on up to $155bn in imports. Retaliatory tariffs will also be implemented by Mexico.

Trump, who defends tariffs as protecting local jobs and manufacturing, acknowledged on Sunday that the US may feel a “little pain” in the “short term”. However, in a post on social media, he said it would “all be worth the price”.

He also reaffirmed his commitment to impose tariffs on the European Union, which he attributed to the lack of US imports, telling reporters that they will start “pretty soon.”