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Asian stock markets slumped on Monday and US equity futures pointed sharply lower after US President Donald Trump's tariffs on Canada, Mexico and China triggered fears of a broad trade war and hit to global growth.
The US dollar shot to a record high against the Chinese yuan in offshore trading, and jumped to the highest since 2003 against Canada's currency and the strongest since 2022 versus Mexico's peso.
Japan's Nikkei share average tumbled as much as 2.3 per cent in the first minutes of trading, and Australia's benchmark - which often functions as a proxy for Chinese markets - also slumped more than 2 per cent.
Hong Kong stocks open later in the day, while mainland markets remain shut until Wednesday for Lunar New Year holidays.
Trump slapped Canada and Mexico with duties of 25 per cent and China with a 10 per cent levy at the weekend, as he had threatened last month, calling the measures necessary to combat illegal immigration and the drug trade.
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Canada and Mexico immediately vowed retaliatory measures, and China said it would challenge Trump's levies at the World Trade Organization.
The tariffs, outlined in three executive orders, are due to take effect 12:01 a.m. ET (0501 GMT) on Tuesday.
Trump's move was the first strike in what could usher in a destructive global trade war and drive a surge in US inflation that would "come even faster and be larger than we initially expected," said Paul Ashworth of Capital Economics.
A model gauging the economic impact of Trump's tariff plan from EY chief economist Greg Daco suggests it would reduce US growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in "stagflation" at home.
Barclays strategists previously estimated that the tariffs could create a 2.8 per cent drag on S&P 500 company earnings, including the projected fallout from retaliatory measures from the targeted countries.
S&P 500 futures slid 1.7 per cent, after a 0.5 per cent retreat for the cash index on Friday, when the White House reiterated Trump's plan to announce tariffs on Saturday. Nasdaq futures slumped 2.5 per cent, following Friday's 0.3 per cent loss for the cash index.
The US dollar advanced 0.7 per cent to 7.2552 yuan in the offshore market early in Asia's morning, having earlier pushed to the record high of 7.3765 yuan. There will be no official onshore trading due to holidays.
The US currency climbed 2.3 per cent to 21.15 Mexican pesos, crossing the 21-peso line for the first time since July 2022, and rose 1.4 per cent to C$1.4755, a level not seen since 2003.
The euro plunged as much as 2.3 per cent to $1.0125 - the lowest level since November 2022 with Europe also potentially in Trump's tariff crosshairs.
Japan's yen was more resilient, losing 0.2 per cent to 155.53 per dollar.
Cryptocurrency bitcoin tumbled as much as 5.8 per cent to a three-week low of $96,191.39.
Oil prices rose, with US West Texas Intermediate crude up 2.4 per cent at $74.27 a barrel and Brent crude futures adding 1 per cent to $76.40 a barrel.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
