The dollar surged while equity markets and digital currencies plunged after US President Donald Trump made good on his threat to impose tariffs on imports from Canada, Mexico and China.
European and US stock futures slumped, while an index of Asia-Pacific shares dropped the most in nearly six months in response to the punitive measures taken against some of America’s biggest trading partners.
Fears the action will stoke price pressures also spurred a rise in the yields on two-year US Treasuries.
The selloff ricocheted across asset classes on Monday, with traders also slashing positions in a range of tokens that had benefitted from Trump’s pro-crypto statements.
The euro extended its decline after he said tariffs on EU goods would “definitely happen.”
The rapid escalation in tensions constitutes the most extensive act of protectionism taken by a US president in almost a century, given its knock-on effect on everything from inflation to geopolitics and economic growth.
Trump said he plans talks on Monday with Canada and Mexico ahead of the tariffs coming into force. The levies are set to take effect Feb. 4, barring a last-minute deal.
