Global stocks plunged in early trading on Monday after President Donald Trump announced wide-reaching tariffs on America’s largest trading partners.Â
The S&P 500 was down around 1.7 percent in the hour before markets open, and the tech-heavy Nasdaq was almost 2 percent lower.Â
Trump announced tariffs of 25 percent on Canada and Mexico over the weekend, the levies will be implemented on Tuesday if no eleventh hour deal is made.Â
Trump also threatened the EU with similar measures, and said trade with the UK is ‘out of line’ but a deal ‘can be worked out.’
The Stoxx Europe 600, representing the biggest companies across the continent, was down 1.4 percent in morning trading.Â
US carmakers, whose supply chains rely on Mexico and Canada, are leading Wall Street’s losses, with GM and Ford down 6 and 4 percent respectively. Â
Trump is set to hold talks with Canadian Prime Minister Justin Trudeau and members of the Mexican leadership on Monday morning.Â
‘I don’t expect anything very dramatic,’ Trump said of the planned phone calls.Â
Trump, pictured at the New York Stock Exchange in December, has announced sweeping tariffs on the US’s largest trading partners and neighborsÂ
‘We put tariffs on. They owe us a lot of money, and I’m sure they’re going to pay.’Â
Both countries have promised to retaliate with their own tariffs on US goods if Trump’s measures go into effect.Â
Trudeau pledged 25 percent tariffs on $106 billion worth of US goods in a press conference on Saturday.Â
Mexican President Claudia Sheinbaum said she will outline her own measures on Monday.Â
Trump has also announced a 10 percent tariff on China, and the country has vowed ‘corresponding countermeasures’ but has not released the details.Â
Trump said he may raise tariffs higher against countries that bring in retaliatory measures. Â
The president has said the tariffs are a way to force countries to ‘balance out their trade’, as well as prevent illegal immigration and the flow of drugs into the US.Â
In order to get tariffs lifted Trump said affected countries must ‘stop people from pouring into our country. They have to stop people from pouring in and we have to stop fentanyl, and that includes China.’Â
Economists have warned that a trade war could push up inflation and threaten growth, the Wall Street Journal reported.Â
