HONG KONG: Asian stocks tanked and the dollar surged on Monday (Feb 3) after Donald Trump signed off huge tariffs on China, Canada and Mexico, and warned the European Union would be hit “pretty soon”.
Less than two weeks after moving back into the White House the US president on Saturday made good on warnings that he would resume his hardball tactics, sparking fears of trade wars that could hammer the global economy.
The move will see 25 per cent levies on imports from Canada and Mexico and 10 per cent duties on Chinese goods.
Analysts at Oxford Economics said the tariffs could see Mexican inflation surge to 6 per cent annually, from 4.2 per cent in December, while the peso sank 7 per cent.
Chief EY economist Gregory Daco said Canada’s economy could shrink 2.7 per cent this year and 4.3 per cent next year.
White House Press Secretary Karoline Leavitt said tariffs were “promises made and promises kept by the president”.
Canada said it would file a World Trade Organization claim against the United States, while Mexican President Claudia Sheinbaum announced that retaliatory tariffs would be imposed on US products.
China’s trade ministry said Beijing would take “corresponding countermeasures”.
While the decision had been well-flagged, equity markets took a hefty hit, with all three main indexes on Wall Street turning negative at the end of Friday trade after Trump reaffirmed he would impose the tariffs.
In Asia, the Year of the Snake started with a nasty bite.
Tokyo, Seoul and Jakarta each shed more than 2 per cent while Sydney, Bangkok and Wellington were each off more than 1 per cent. Singapore and India also fell, while Hong Kong gave up early deep losses to end only marginally down. Shanghai remained closed for a holiday.
London opened more than 1 per cent lower, while Paris and Frankfurt each lost more than 2 per cent.
https://www.channelnewsasia.com/business/japan-south-korea-asian-stocks-fall-united-states-tariffs-donald-trump-4912146
