Asian actions slipped on Monday morning after US President Donald Trump followed his promise as Impose prices in Canada, Mexico and China.
Investors are preparing for a potential trade war that could reach the profits of large companies and global growth to work.
Canada and Mexico said They will retaliate with reprisals While China promised “corresponding countermeasures” and promised to challenge Trump’s decision to the World Trade Organization.
Trump said the prices were necessary to stop the flow of illegal and immigration drugs in the United States.
The Hong Kong Hang Seng index fell 1.3%, the Nikkei 225 in Japan was 2.4% decrease, the Kospi of South Korea dropped by 3% and the ASX 200 of the Australia was 1.8% lower.
The markets in continental China remained closed for the new year lunar holidays.
Meanwhile, the US dollar showed strength, going to a record level against the Chinese yuan, while the Canadian dollar has dived at its lowest level since 2003.
“The prospect of having a long and extension of commercial spitting between the two largest economies in the world pushes investors to withdraw the risks of the table today,” said Tim Waterer, chief analyst of the company of the company KCM Trade financial services.
“The other concern for investors is which countries can be on the list of Trump’s prices then.”
The prices announced by the Trump administration during the weekend target the three largest trade partners in the United States and the American president threatened that he may not stop there.
Trump also promised to impose prices on the European Union “very soon”.
The investment chief strategist of the Saxo Investment Bank, Charu Chanaa, warned that although the prices can be beneficial for the US economy in the short term, in the long term, they present significant risks.
“The repeated use of prices would encourage other countries to reduce dependence on the United States, weakening the global role of the dollar,” she added.
Trump said he would speak to the leaders of Canada and Mexico on the prices that should come into force on Monday at midnight on Monday.
The two countries face 25% prices on their exports to the United States, while Chinese products will face an additional 10% tax.
