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 they will hit back with retaliatory tariffs while China promised “corresponding countermeasures” and vowed to challenge Trump’s move at the World Trade Organization. Hong Kong’s Hang Seng Index was down 0.7%, Japan’s Nikkei 225 was 2.8% lower, South Korea’s Kospi tumbled 3% and Australia’s ASX 200 fell 1.9%. The US dollar was showing strength, rising to a record high against China’s yuan, while the Canadian dollar plunged to its lowest level since 2003. The prospect of a long and protracted trade spat is causing investors to take risk off the table today, said Tim Waterer, chief market analyst at financial services firm KCM Trade. The other worry for investors is which countries may be on Trump’s tariff hit list next. The tariffs announced by the Trump administration over the weekend target the United States’ three largest trading partners and the US president has threatened he might not stop there. Trump has also vowed to impose tariffs on the European Union “pretty soon”.
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