How Donald Trump's tariffs upended financial world as nations brace for trade war

US President Donald Trump's sweeping tariffs on Canada, Mexico and China spurred concerns of a broader global trade war, affecting Indian and Asian stock markets. The Nifty 50 was down 0.52% at 23,361.05, while the BSE Sensex shed 0.41% to 77,186.74.

The Indian rupee also weakened as it went past 87 against the US dollar for the first time ever.

Anirudh Garg, partner and fund manager at Invasset Portfolio Management Services, told Reuters that the Trump tariffs could severely disrupt global trade, slowing economic growth worldwide and spooking markets.

State-owned companies declined 3.2%, taking their two-session loss to 6.2% and erasing all gains made in the pre-budget rally last week.

The rupee declined to 87.28 per U.S. dollar before closing at 87.1850, down by nearly 0.7%, its biggest single-day percentage loss since Jan 13.

The dollar rallied after Donald Trump imposed a 25% charge on Mexican and Canadian imports into the US. He imposed a 10 percent charge on imports from China.

Also read: Donald Trump says whoever is against tariffs, including ‘Fake News Wall Street Journal,’ is being ‘controlled by China'

The Mexican peso tumbled more than 2% to touch its lowest in nearly three years, while the offshore Chinese yuan fell 0.3%.

In the United States, the shares of several carmakers slumped. General Motors slid 6.4%, Ford dropped 3.8% and Tesla shed 2.9% in premarket trading. U.S.-listed shares of e-commerce firms including PDD Holdings declined 4.5%, while Alibaba lost 1.9%.

Heavyweight Big Tech stocks dropped, with Microsoft down 1.5%, Apple shedding 1.9% and Amazon 2.3% lower. A 2.2% slump in Russell futures pointed to sharp declines for domestically focused stocks.

Also read: Trump tariff | Highlights: Canada to pursue legal action against US for tariffs

Asian stocks nosedived

Several Asian stocks that rely on exports, including Japanese carmakers and Chinese e-commerce firms, saw a massive slump. The MSCI Asia Pacific Index fell nearly 3% in Monday trading in its biggest intraday drop in six months.

Shares of Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. all dropped at least 5%. South Korean automaker Kia Corp., which has a plant in Mexico, ended the day down 5.8%.

Some artificial intelligence hardware firms in Taiwan that have production in Mexico took a hit, with shares of Quanta Computer Inc. down nearly 10%. Delta Electronics Inc., which has investments in Mexico, dropped.

Asia’s biggest chip exporters, including Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., declined as Trump said he would tax chips, repeating that vow after his meeting Friday with Nvidia Corp. Chief Executive Officer Jensen Huang.

Meanwhile, Japanese semiconductor equipment makers, which typically generate the bulk of their revenue from China, also declined. Shares of Tokyo Electron Ltd. fell 1.7%, while Advantest Corp. and Disco Corp. tumbled at least 4%.

Cryptocurrency

Crypto stocks also dropped. Coinbase was down 5.8% and miners Marathon Digital and Riot Platforms shedding about 6% each. Bitcoin went below the $100,000 mark.

Bitcoin, the world's biggest cryptocurrency, hit a three-week low of $91,441.89 overnight and stood at $95,730.35 at 0941 GMT, down 6.2% on the day. Ether has lost 25 percent of its value since Friday.

Trump's own cryptocurrency $TRUMP slid below $20.

With inputs from Reuters, Bloomberg