US stock futures on Monday pointed to sharp losses for the major indexes, as Wall Street showed the effects of President Donald Trump’s announcement of tariffs on China, Mexico, and Canada.
Nasdaq 100 futures (NQ=F) dived 1.7%, leading the way down but paring losses notched earlier in the morning. S&P 500 futures (ES=F) spiraled 1.5%, and futures attached to the Dow Jones Industrial Average (YM=F) tumbled 1.3%, or around 580 points.
The tariffs, set to take effect on Tuesday, will include 25% duties on Canada and Mexico, and 10% on China. Energy imports from Canada will be lower with a 10% duty.
Trump has also said tariffs on Europe will “definitely happen”, but gave no further detail. European stock markets (^STOXX) on the start of trading on Monday.
The US dollar index (DX-Y.NYB, DX=F) rose to trade near its highest levels in 12 months. Meanwhile, crude oil (BZ=F, CL=F) futures jumped around 2%.
With Trump’s tariffs arriving as expected over the past week, focus has been honed in on retaliatory announcements. As Yahoo Finance’s Ben Werschkul reported, Canada and Mexico were quick to announce measures across a range of US goods. Prime Minister Justin Trudeau said Canada will place 25% counter-tariffs on around $107 billion in American-made products.
The trade war is causing “considerable uncertainty about President Trump’s trade agenda for 2025.” That uncertainty is a large part of the Fed’s desire to keep a hold on rates for fears of a rise in inflation.
The tariffs are due to impact consumers directly across a number of industries. Automobiles and auto parts, gas and oil, clothes, computers, whiskey, and avocados are a small selection of items whose prices are expected to rise.
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Asian markets slide as Trump tariffs make impact
Asian markets, the first to open since President Donald Trump’s tariff announcement, have seen big slides as investors react to a trade war poised to erupt.
Major Asian indexes all saw heavy losses throughout the day’s trade as The MSCI Asia Pacific Index fell more than 2%, 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%.
Markets in mainland China have remained closed for the Lunar New Year holiday, but with China being singled out for a 10% tariff on exports we can expect to see a similar downturn.
Currently, Beijing has not announced a plan of economic retaliation. Instead there have been calls to “meet China halfway” from the Chinese ministry of Commerce in negotiations around the upcoming implementation of duties.
Some of the biggest sectors to see downturns from the tariffs include:
Automakers saw shares drop of at least 5% in household names such as Toyota (TM), Honda (HMC) and Nissan (7201.T)
Chinese e-commerce platforms are under fire as the “de minimus” trade exemption for small package is getting expired. Leading to impacts on costs for clothing, accessories, home goods and electronics.
Asia’s biggest chip exporters, including Taiwan Semiconductor Manufacturing Co (TSM) . and Samsung Electronics Co (005930.KS)., dipped by 1% as Trump said he would tax the essential components of electronics.
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