Asian shares slid on Monday morning after US President Donald Trump followed through on his promise to impose tariffs on Canada, Mexico and China.<\/p>\n
Investors are bracing for a potential trade war that could hit the earnings of major companies and dent global growth.<\/p>\n
Canada and Mexico have said that they will hit back with retaliatory tariffs while China promised \u201ccorresponding countermeasures\u201d and vowed to challenge Trump\u2019s move at the World Trade Organization.<\/p>\n
Trump has said the tariffs are necessary to halt the flow of illegal drugs and immigration into the US.<\/p>\n
Hong Kong\u2019s Hang Seng Index was down 1.3%, Japan\u2019s Nikkei 225 was 2.4% lower, South Korea\u2019s Kospi tumbled 3% and Australia\u2019s ASX 200 was 1.8% lower.<\/p>\n
Markets in mainland China remained closed for the Lunar New Year holiday.<\/p>\n
Meanwhile, the US dollar was showing strength, rising to a record high against China\u2019s yuan, while the Canadian dollar plunged to its lowest level since 2003.<\/p>\n
\u201cThe prospect of having a long and protracted trade spat between the world\u2019s two biggest economies is causing investors to take risk off the table today,\u201d said Tim Waterer, chief market analyst at financial services firm KCM Trade.<\/p>\n
\u201cThe other worry for investors is which countries may be on Trump\u2019s tariff hit list next\u201d.<\/p>\n
The tariffs announced by the Trump administration over the weekend target the United States\u2019 three largest trading partners and the US president has threatened he might not stop there.<\/p>\n
Trump has also vowed to impose tariffs on the European Union \u201cpretty soon\u201d.<\/p>\n
Chief investment strategist at investment bank Saxo, Charu Chanana, warned that while tariffs could be beneficial for the US economy in the short term, in the long run they pose significant risks.<\/p>\n
\u201cRepeated use of tariffs would incentivise other countries to reduce reliance on the US, weakening the dollar\u2019s global role,\u201d she added.<\/p>\n
Trump has said he will speak to Canada and Mexico\u2019s leaders on Monday about the tariffs which are due to come into effect at midnight on Tuesday.<\/p>\n
The two countries are facing tariffs of 25% on their exports to the US, while Chinese goods will face an additional 10% tax.<\/p>","protected":false},"excerpt":{"rendered":"
Asian shares slid on Monday morning after US President Donald Trump followed through on his promise to impose tariffs on Canada, Mexico and China. Investors are bracing for a potential trade war that could hit the earnings of major companies and dent global growth. Canada and Mexico have said that they will hit back with […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-109374","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/109374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/comments?post=109374"}],"version-history":[{"count":0,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/109374\/revisions"}],"wp:attachment":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/media?parent=109374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/categories?post=109374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/tags?post=109374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}