Global stock markets are continuing to tumble Tuesday morning after President Donald Trump kickstarted tariffs on Canada, Mexico and China overnight.
US stocks fell sharply after Trump announced Monday that there was ‘no room left’ for negotiations that could lower the tariffs. The S&P 500 dropped 1.8 per cent, the Dow Jones Industrial Average fell 1.5 per cent and the Nasdaq composite slumped 2.6 per cent.
European stock markets retreated at the open Tuesday, with the possibility that similar levies could hit Europe. London‘s FTSE 100 index shed 0.6 per cent, the Paris CAC 40 index shed 1.0 per cent and Frankfurt’s DAX slid 1.4 per cent.
Shares were mixed Tuesday in Asia with the Hang Seng in Hong Kong losing 0.4 per cent and Tokyo’s Nikkei 225 dropping 1.2 per cent. However, the Shanghai Composite index edged 0.2 per cent higher.
China on Tuesday swiftly retaliated against the tariffs, announcing 10 to 15 per cent hikes to import levies covering a range of American agricultural and food products.
Beijing‘s foreign ministry warned the country has never succumbed to bullying or coercion, and that ‘trying to exert extreme pressure on China is a miscalculation and a mistake’.
China also placed twenty five US firms under export and investment restrictions on national security grounds, but refrained from punishing any household names – as it did when it retaliated against the Trump administration’s February 4 tariffs.
Canadian Prime Minister Justin Trudeau said his country will impose 25 per cent tariffs on over $100billion worth of American goods for as long as the US tariffs remain in place.
Global stock markets continue to tumble after the sweeping tariffs that President Donald Trump imposed on Canada and China came into effect overnight
European stock markets retreated at the open Tuesday, with the possibility that similar levies could hit Europe. London ‘s FTSE 100 index shed 0.6 per cent
The Paris CAC 40 index shed 1.0 per cent to 8,108.71
Germany’s DAX slipped 1.4 per cent to 22,733.26 on Tuesday
European and Asian shares were mostly lower Tuesday after Trump’s new round of tariffs took effect.
China hit back at Washington’s move to raise tariffs by 20 per cent across the board with higher duties of up to 15 per cent on US farm exports.
Germany’s DAX slipped to 22,733.26 while in Paris the CAC 40 declined 1.1 per cent to 8,108.71. Britain’s FTSE 100 lost 0.4 per cent to 8,837.92.
The future for the S&P 500 rose 0.1 per cent in pre-market trading while that for the Dow Jones Industrial Average was unchanged.
In Asian trading, Tokyo’s Nikkei 225 dropped to 37,331.18, while the Hang Seng in Hong Kong dropped to 22,922.16. The Shanghai Composite index edged 0.2 per cent higher to 3,324.21.
South Korea’s Kospi gave up 0.2 per cent to 2,528.92. Taiwan’s Taiex shed 0.7p er cent, while Bangkok’s SET lost 1.1 per cent.
Business leaders around the world are warning of widespread destruction if Trump continues with the tariffs.
Trump has vowed to bring down prices for Americans, but experts warn consumers will be adversely impacted by the trade plan.
Billionaire investor Warren Buffett compared Trump’s tariffs on Canada and Mexico to an ‘act of war’ during an interview with CBS on Sunday.
Canadian Foreign Minister Melanie Joly described the tariffs as ‘an existential threat to us’ and argued that ‘thousands of jobs in Canada at stake’.
Similarly, Canadian Chamber of Commerce CEO Candace Laing warned that Trump’s tariffs are ‘forcing Canada and the US toward recessions, job losses and economic disaster’.
Beijing has warned China has never succumbed to bullying or coercion, and that ‘trying to exert extreme pressure on China is a miscalculation and a mistake’. Pictured: Chinese President Xi Jinping at The Great Hall of People on March 04, 2025 in Beijing, China
Lame duck Canadian Prime Minister Justin Trudeau announced that Canada will respond to Donald Trump’s tariffs – which go into effect midnight Tuesday – with some of their own
Trade tensions risk exacerbating US inflation and China’s continuing efforts to mount a durable post-COVID economic recovery, which has been heavily reliant on exports.
The US-China Business Council (USCBC) on Tuesday applauded Trump’s goal of addressing the illegal trade of fentanyl, but said raising tariffs on Chinese products ‘is not the way to achieve that goal.’
‘Across-the-board tariffs will hurt US businesses, consumers, and farmers and undermine our global competitiveness,’ USCBC President Sean Stein said in a statement.
All the same, the China-US trade war could benefit third countries.
Since the US and China imposed tit-for-tat tariffs during Trump’s first term, Beijing has taken steps to reduce its reliance on American farm goods by promoting production at home and buying more from countries like Brazil.
American agricultural exporters could also step up efforts to replace the China market by shipping more to Southeast Asia, Africa and India.
‘Chinese tariffs on US wheat and corn imports should be supportive for demand for Australian wheat and barely exports,’ said Dennis Voznesenki, analyst at Commonwealth Bank in Sydney.
‘However, China’s recent slowdown in imports of feed grains from all origins should temper the excitement.’
The pan-European STOXX 600 index was down 0.8 per cent Tuesday at 9.33am GMT, retreating from the previous session’s record high
Shares were mixed Tuesday in Asia with the Hang Seng in Hong Kong losing 0.4 per cent
Tokyo’s Nikkei 225 dropped 1.2 per cent to 37,331.18
The Shanghai Composite index edged 0.2 per cent higher
China has accused the White House of ‘blackmail’ over its tariff hike, saying it had some of the world’s toughest anti-drug policies.
Analysts say Beijing still hopes to negotiate a truce with the Trump administration, deliberately setting its tariff hikes below 20 per cent to leave Chinese negotiators room to hash out a deal, but each escalation reduces the chance of a rapprochement.
‘China’s government is signaling that they do not want to escalate,’ said Even Pay, agriculture analyst at Trivium China.
‘It’s fair to say we’re in the early days of Trade War 2.0,’ Pay added, noting that there is still time to avoid a protracted trade war if Trump and Chinese President Xi Jinping are able to strike a deal.
The new US tariffs represent an additional hike to preexisting levies on thousands of Chinese goods.
Some of these products bore the brunt of sharply higher US tariffs under former president Joe Biden last year, including a doubling of duties on Chinese semiconductors to 50 per cent and a quadrupling of tariffs on Chinese electric vehicles to over 100 per cent.
The 20 per cent tariff will apply to several major US consumer electronics imports from China that were previously untouched, including smartphones, laptops, videogame consoles, smartwatches and speakers and Bluetooth devices.
China responded immediately after the deadline, announcing it will impose an additional 15 per cent tariff on US chicken, wheat, corn and cotton and an extra 10 per cent levy on US soybeans, sorghum, pork, beef, aquatic products, fruits and vegetables and dairy imports from March 10.
US stocks fell sharply after Trump announced Monday that there was ‘no room left’ for negotiations that could lower the tariffs. The Nasdaq composite slumped 2.6 per cent
The future for the S&P 500 rose 0.1 per cent in pre-market trading
The Dow Jones Industrial Average was unchanged early Tuesday after having fallen 1.5 per cent on Monday
Beijing also added 15 US companies to its Export Control List, which prohibits Chinese firms supplying American companies with dual-use technologies, and 10 American companies to its Unreliable Entity for selling arms to Taiwan, which China claims as its own territory.
‘We’re still on track to 60 per cent (tariffs),’ said Cameron Johnson, supply chain expert at Tidalwave Solutions, referring to Trump’s campaign trail threat.
‘At the moment, with 20 per cent, it just barely moves the needle for companies wanting to move potential supply chains out of the country,’ he added. ‘At 35 per cent, we start to see that companies will start to move or consider other strategies.’
China is the biggest market for US agricultural products, and the sector has long been vulnerable to being used as a punching bag in times of trade tensions.
Chinese imports of US agriculture goods fell for a second year to $29.25billion in 2024 compared to $42.8billion in 2022.
