Updated February 03, 2025 at 07:32 AM ET
U.S. stocks sank at the open on Monday, as the nation braces for a new phase of a global trade war based on tariffs.
The Dow fell over 1%, or 500 points. The tech-heavy Nasdaq dropped 2% and the broader S&P 500 index fell 1%.
Over the weekend, President Trump's announced new tariffs on the United States' largest trading partners. Starting Tuesday, imports from Canada and Mexico will pay 25% duties and those from China 10%. Energy imports from Canada will be lower with a 10% duty.
Some of the biggest losers this morning were stocks of American automakers: Ford lost 3%, GM 5% and Tesla 4%. Automakers run a complex supply chain web between the U.S., Canada and Mexico. Many also manufacture cars in Mexico or Canada before exporting them to the U.S. S
Global stock markets have also slumped, the dollar strengthened, oil prices rose.
Asian markets fell with Taiwan, South Korea and Japan performing the worst. The Nikkei Index in Japan down by around 2.5%, while Hong Kong's Hang Seng dropped by 1.3% in early trading.
The President's tariff threats also rattled markets in Europe. The pan-European STOXX 600 index was down 1.4% Monday morning. Germany's DAX was down 2%. The FTSE 100 index, which tracks the hundred largest companies listed in London, fell 1.25% at the start of trading.
President Trump said Sunday night that new tariffs on the EU would "definitely happen" but suggested he may take a softer line on the U.K., saying he had a good relationship with Prime Minister Keir Starmer but that the U.K. "might" still face penalties.
The dollar meanwhile strengthened against a range of currencies including the euro, the Mexican peso and the Canadian dollar.
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