HONG KONG: Asian stocks tumbled and the dollar rallied yesterday after US President Donald Trump imposed steep tariffs on China, Canada, and Mexico, vowing the EU would be next.
Less than two weeks into his second term, Trump followed through on threats to revive his hardline trade policies, sparking fears of a global slowdown.
The new tariffs impose 25 per cent levies on imports from Canada and Mexico and 10 per cent on Chinese goods.
Oxford Economics warned Mexican inflation could jump to 6 per cent annually, while the peso plunged 7 per cent.
EY’s Gregory Daco projected Canada’s economy could shrink 2.7 per cent this year and 4.3 per cent in 2026.
Mexico and Canada vowed retaliatory measures, while China pledged “corresponding countermeasures.”
Despite the tariffs being well-signaled, markets reeled.
Tokyo and Seoul shed over 2 per cent, Hong Kong fell 1 per cent, and Taipei plunged 3 per cent, with TSMC tumbling 5.3 per cent after China’s DeepSeek unveiled a cheaper AI model rivaling U.S. tech firms.
The dollar surged 2.3 per cent against the peso and over 1 per cent against the Canadian dollar, also rising against the won, Australian dollar, and rand.
Gold slipped after hitting a record $2,800 last week.
Trump’s move capped a turbulent week for markets, rattled by DeepSeek’s R1 chatbot launch and overshadowing strong Apple earnings and stable U.S. inflation data.
Oil prices jumped as the tariffs included energy imports. – AFP
