Global shares are pressed when Trump's tariffs hit the markets Business and Economics News

US shares are at its lowest level after President Donald Trump had been sworn in two weeks ago and other global financial markets descended after him ordered tariffs In Canada, Mexico and China, while world leaders responded to his threats to expand the tariffs of the European Union.

The S&P 500 benchmark fell 1.7 percent on Monday at the opening bell on the heels of the largest daily losses of the year of Asian and European storms because of fears of economic harmful trade war.

Trump said his tariffs for the three largest trading partners in the United States, which had to come into force on Tuesday, could cause Americans some short-term pain, but “long-term, the United States has been detached from almost every country in the world.”

Later on Monday, Trump said he would stop new rates for Mexico for a month after Mexico agreed to strengthen his US border with 10,000 National Guard officials to stop the flow of illegal drugs, especially fentanyl.

Mexican President Claudia Shainbaum said the agreement also includes a US commitment to act to prevent high -power weapons trafficking in Mexico. The two leaders talked on the phone on Monday, just hours before the US tariffs for Mexico, China and Canada had to come into force.

The two countries will use the monthly pause to participate in additional negotiations, Trump said.

Speaking to Washington, Colombia County, on Sunday, after returning from his Mar-Lgo mansion in Florida, Trump said the EU of the 27-national EU would be the next in the fired line, but did not say when.

“They don't take our cars. They do not take our agricultural products. They take almost nothing and we accept everything from them, “he told reporters.

EU leaders meet at an informal summit in Brussels on Monday said Europe would be ready to fight if the US imposed tariffs, but also called for reason and negotiations.

Trump hinted that the UK, who left the EU in 2020, could be spared tariffs, saying, “I think a person can be developed.”

The United States is the largest EU commercial and investment partner. According to Eurostat data from 2023, the United States had a deficit of EUR 155.8 billion ($ 161.6 billion) with the EU in trade in goods offset by an excess of € 104 billion ($ 107.6 billion) in Services.

EU foreign policy chief Kaja Kalas said there were no trade war winners, and if a one exploded between Europe and the United States, “Then the one who laughs at the country is China.”

The markets are pressed

Trump said on Monday that he was talking to Canadian Prime Minister Justin Trudeau and will do it again at 15:00 (20:00 GMT).

Both Canada and Mexico had declared retaliatory rates for the United States.

Economists said the Republican President's plan to impose 25 percent tariffs on Canada and Mexico, and 10 percent tariffs for China would slow down global growth and increase prices higher for Americans.

The fear is that these tariffs will increase grocery prices, electronics and any other household items in the United States, exemplifying the US inflation, which is largely delayed by its peak nearly three years ago. Persistently high or accelerating inflation can prevent the US Federal Reserve from reducing interest rates, which began in September to give impetus to the domestic economy.

Trump claims that tariffs are needed to limit immigration and drug trafficking and stimulate internal industries.

The reaction to the financial market on Monday reflects fears about the commercial war. The shares in Tokyo ended the day in almost 3 percent, and the Australian standard – often proxy trade in the Chinese markets – dropped by 1.8 percent. The Chinese market of the continental was closed to the lunar New Year holidays.

At noon in Europe, the German DAX index has dropped by 1.8 percent, FTTE FTSE 100 percent of the UK is 1.5 percent.

The Chinese Yuan, the Canadian Dollar and the Mexican Peso all went down against a towering dollar. With Canada and Mexico, the best sources of raw oil imports into the US, US oil prices jumped over 1 %, while gasoline futures increased by nearly 3 percent.

Trump's tariffs will cover almost half of the entire US imports and will require the United States more than doubling their own production production to cover the precipice – an impossible task in the near future, according to Ing analyzers.

Other analysts have said that tariffs can throw Canada and Mexico into a recession and trigger “stagflation” – high inflation, stagnant growth and increased unemployment – at home.

In Europe, Deutsche Bank economists have said they are currently reporting at 0.5 percent of the hit on gross domestic product (GDP) if Trump imposes 10 percent EU rates.

National emergency

The White House Fact Leaf does not give details of what Canada, Mexico and China will have to do to win discounts.

Trump has promised to keep sanctions in place until what he described as a national emergency situation over fentanyl, a deadly opioid and illegal immigration to the United States.

China called the problem of Fentanyl America and said it would cause tariffs in the World Trade Organization and take other countertops, but also left the door open open.

Canada said it would take court action according to the relevant international authorities to challenge tariffs.

Automobile manufacturers would be particularly affected by new vehicle rates built in Canada and Mexico, loading a huge regional supply chain in which parts could cross the limits several times before the final assembly. Ford and General Motors' shares fell by 4 percent to 5 percent.

The shares in Volkswagen, Porsche, Stellantis and Daimler Truck all fell by about 5 to 6 percent in European trade on Monday.

Investment bank analysts have estimated that 8 billion euros ($ 8.2 billion) from VW revenue will be influenced by rates and € 16 billion ($ 16.5 billion) in Stellantis.