Stock markets in Europe and Asia took a hit Tuesday as new tariffs from U.S. President Donald Trump, targeting Canada, Mexico, and China, went into effect, rattling global trade.
China fired back at the U.S.’s blanket 20% tariff hike by slapping duties of up to 15% on American agricultural exports like beef, corn, and soy, escalating the trade spat.
In Europe, Germany’s DAX tumbled 1.8% to 22,733.26, France’s CAC 40 slid 1.1% to 8,108.71, and the UK’s FTSE 100 dipped 0.4% to 8,837.92. Futures hinted at a mixed U.S. open, with the S&P 500 up 0.1% and the Dow Jones Industrial Average flat.
Asian markets also faltered. Japan’s Nikkei 225 fell 1.2% to 37,331.18, Hong Kong’s Hang Seng edged down 0.4% to 22,922.16, and South Korea’s Kospi slipped 0.2% to 2,528.92. Taiwan’s Taiex dropped 0.7%, and Thailand’s SET declined 1.1%. Bucking the trend, China’s Shanghai Composite ticked up 0.2% to 3,324.21.
The sell-off followed Monday’s sharp declines on Wall Street, where the S&P 500 shed 1.8% after Trump declared no further talks would soften the tariffs hitting Canada and Mexico starting Tuesday. He’d previously pushed the deadline back once for negotiations. The Dow fell 1.5%, and the Nasdaq composite plunged 2.6%.
China’s retaliatory tariffs on U.S. farm goods, unveiled Tuesday, broadened the fallout from Trump’s trade offensive, noted Francis Lun, CEO of Geo Securities in Hong Kong. “China’s likely done buying U.S. crops—those orders will shift to South America,” Lun said. “It’s a no-win scenario. Everyone loses.”
Investors had banked on Trump opting for a gentler trade stance. Monday’s drop trimmed the S&P 500’s post-election gain to just over 1%, down from a high of more than 6%, a rally fueled by optimism over Trump’s pro-business agenda. That optimism faded as weaker U.S. economic data rolled in, including reports of growing household gloom over inflation tied to tariff fears.
Monday’s U.S. manufacturing update added to the unease. Growth persists, but it’s slower than expected, with new orders shrinking and prices climbing as debates swirl over who’ll foot the tariff bill.
High-fliers like Nvidia and Tesla bore the brunt of the market’s slide. Nvidia cratered 8.8%, and Tesla slipped 2.8% on Monday, amplifying losses in once-hot sectors.
Elsewhere Tuesday, U.S. crude oil fell 93 cents to $67.44 per barrel on the New York Mercantile Exchange, while Brent crude dropped $1.10 to $70.52. The dollar weakened to 149.86 yen from 149.50, and the euro climbed to $1.0519 from $1.0488. Bitcoin slumped 8.7% to roughly $83,900, per CoinDesk.