Asia-Pacific Markets Fall After Trump Imposes Tariffs on Canada, Mexico, and China
The Asia-Pacific markets traded lower on Monday after US President Donald Trump imposed tariffs on Canada, Mexico, and China over the weekend. The tariffs, which took effect on Saturday, are expected to have a significant impact on the global economy.
The Australian S&P/ASX 200 dropped 1.61%, while Japan’s Nikkei 225 fell 1.99% and the Topix lost 1.87%. South Korea’s Kospi dropped 2.52%, and the small-cap Kosdaq traded 2.79% lower. Hong Kong’s Hang Seng Index dropped 1.23% at the open, and India’s Nifty 50 fell 0.69%, while the Sensex lost 0.88%.
The Indian government’s Union Budget, which was released over the weekend, offered a significant income tax relief to the country’s middle class and pledged to reduce its fiscal deficit to 4.4% of its GDP for the year beginning April 1.
Chinese markets remained closed for the Lunar New Year holiday, but Caixin/S&P Global services manufacturing activity data for China is expected to be released later in the day. The PMI is expected to come in at 50.5, according to Reuters poll estimates.
The tariffs imposed by Trump are expected to have a significant impact on the global economy, particularly on the three countries affected. The US conducts around $1.6 trillion in annual business with Canada, Mexico, and China combined. Energy exports from Canada will face a reduced 10% tariff, which are set to come into effect on Tuesday stateside.
Last Friday, the three major averages in the US closed lower, with the S&P 500 shedding 0.50% to end at 6,040.53, while the Dow Jones Industrial Average tumbled 337.47 points, or 0.75%, weighed down by a decline in Chevron. The tech-heavy Nasdaq Composite slipped 0.28% to 19,627.44.