Trump's tariff policy is causing Asian stock markets to falter!

Asian stock exchanges posted some massive losses on Monday as markets prepare for US President Donald Trump's upcoming tariff increases. The Tokyo Nikkei 225 index temporarily fell by 3.95 percent and was quoted at 25,653.59 points. The Shanghai Composite and the Hang Seng in Hong Kong also suffered losses, with a decline of 0.97 percent to 3,318.77 points and 1.73 percent to 23,022.05 points respectively.

On Friday, Wall Street experienced a sell-off, with indices falling as much as 2.7 percent. For this Monday, the futures on US indices show further significant drops. It was also announced that the yen was appreciating and one dollar now costs 148.90 yen, almost two yen less than on Friday. This dollar weakness is caused by concerns about the U.S. economy as investors seek safety in Japanese government bonds, whose yields are falling.

Economic Impact of Tariffs

A key issue is the new 25 percent tariffs on imported cars, which will come into force on April 2nd. These measures mainly affect cars and light trucks produced abroad. Analysis shows that Asian manufacturers such as Toyota, Honda and Nissan have already suffered losses, with declines of 3.69 percent, 2.91 percent and 2.92 percent, while Mazda Motors fell over 6 percent.

The estimated annual revenue for the US from these tariffs is over $100 billion (93 billion euros). Mexico, Canada and various European countries will be particularly affected by these new measures. Mexico accounts for nearly 25 percent of auto imports to the U.S., while 13 percent comes from Canada. Prime Minister Mark Carney of Canada has already announced retaliatory tariffs and is planning a government meeting to respond to the new tariffs. Carney called the tariffs a direct attack on Canadian workers and announced that proceeds from these retaliatory tariffs would be used to support Canadian businesses.