Key points
- Tokyo, Seoul fell more than 2pc in early trade on Monday
- Japanese automakers’ shares fall on eve of Trump tariffs
- Trump has imposed tariffs on Canada, Mexico, and China
- Tariffs have triggered strong reactions from Canada, Mexico, and China
- Tariffs to stay in place “until the crisis alleviated”: White House
ISLAMABAD: Japanese stocks plunged, with the Nikkei average losing almost three per cent at one point, after US President Donald Trump slapped tariffs on the United States’ top three trade partners, threatening major economic disruption, according to Bloomberg.
AFP reported that shares in Tokyo and Seoul fell more than two per cent in early trade on Monday in response to US President Donald Trump’s sweeping trade tariffs on Canada, Mexico, and China.
Tokyo’s benchmark Nikkei index fell 2.70 per cent or 1,067.17 points to 38,505.32, while the broader Topix index lost 2.47 per cent or 68.87 points to 2,719.79, according to AFP.
Meanwhile, Seoul’s KOSPI index fell 2.15 per cent to 2,463 in early trade.
Wall Street shares slipped on Friday after the announcement that the United States would impose the new tariffs.
Japanese automakers’ shares
Bloomberg reported that Japanese automakers’ shares also tumbled after Trump pledged to impose tariffs against Canada and Mexico, with investors worried their operations may be upended considering many have factories south of the border from where they send cars into North America.
It reported that Toyota Motor Corp shares fell as much as 5.5 per cent in early Tokyo trading on Monday, the biggest decline since September. Honda Motor Co slid 7.5 per cent while Nissan Motor Co. dropped more than 10.3 per cent, the sharpest intraday decline since late December.
Many of Japan’s legacy brands depend on North America as a crucial market, and sell cars there that were manufactured, assembled or imported over the Mexican border, according to Bloomberg. Honda imports roughly 160,000 cars from Mexico to the US each year, a company executive said in November, Bloomberg reported.
Trump on Saturday signed off on broad 25 per cent tariffs on Mexico and Canada — despite a regional free trade pact — while hitting China with a 10 per cent tariff in addition to levies already in place.
Countermeasures in response
According to media reports, China, Canada, and Mexico on Sunday condemned the latest round of sweeping US tariffs imposed by Donald Trump, vowing to take countermeasures in response to what they described as protectionist policies that threaten global economic stability.
The US tariffs have also triggered strong reactions from Canada and Mexico, with both nations announcing retaliatory measures.
Canadian Prime Minister Justin Trudeau said that his government would impose 25 per cent levies on a range of US imports, affecting goods worth CAD 155 billion (USD 107 billion). Duties on CAD 30 billion worth of goods will take effect on Tuesday, the same day as the US tariffs, while the remaining CAD 125 billion will face tariffs in three weeks’ time.
The Canadian countermeasures target key American exports, including beer, wine, bourbon, fresh fruits, juices, clothing, sports equipment, and household appliances.
LIVE: Canada’s response to U.S. tariffs | EN DIRECT : Réplique aux tarifs douaniers américains https://t.co/1R7HT03O9G
— Justin Trudeau (@JustinTrudeau) February 2, 2025
Trudeau warned that Trump’s actions would not only hurt Canada but also have severe repercussions for American workers and industries.
A White House fact sheet said the tariffs would stay in place “until the crisis alleviated,” but gave no details on what the three countries would need to do to win a reprieve. With input from AFP.
