Stock markets fall after US tariffs spark trade war fears

Stock markets astir the satellite fell pursuing the instauration of tariffs by President Donald Trump connected goods entering the US from China, Canada and Mexico.

Trump has imposed 25% tariffs connected imports from Canada and Mexico, and 20% tariffs against China.

Canada and China announced their ain import taxes connected US goods, portion Mexico is said it had "contingency plans", sparking fears of full-blown commercialized war.

The 3 large banal marketplace indexes successful the US sank pursuing the news, portion the FTSE 100 index of the UK's biggest publicly-listed companies opened sharply little on Tuesday and banal markets successful Asia were besides down.

Analysts person warned tariffs could propulsion up prices for US households and could besides person a sound connected effect connected consumers crossed the world, including the UK.

Trump threatened to enforce the tariffs, which are a taxation added to a merchandise erstwhile it enters a state - connected Canada, Mexico and China successful effect to what claims is the unacceptable travel of amerciable drugs and amerciable immigrants into the US.

But Canadian Prime Minister Justin Trudeau said his state was liable for little than 1% of fentanyl entering the US and would retaliate with 25% tariffs connected $150bn worthy of US goods.

"There is nary justification for [the US's] actions...Canada volition not fto this unjustified determination spell unanswered," Trudeau said successful a connection connected Monday.

He said Canada would archetypal people $30bn worthy of products, and people the remaining $125bn implicit 21 days.

Any caller duties Canada imposes volition beryllium successful spot "until the US commercialized enactment is withdrawn", helium said, adding that his state would prosecute "non-tariff measures" should US tariffs not cease - without specifying what those measures were.

China swiftly announced its ain antagonistic measures, which see 10-15% tariffs connected immoderate US cultivation goods, including wheat, corn, beef and soybeans. China is the US's biggest purchaser of these goods.

"If the United States... persists successful waging a tariff war, a commercialized war, oregon immoderate different benignant of war, the Chinese broadside volition combat them to the bitter end," overseas ministry spokesperson Lin Jian said.

Before the US tariffs connected Mexican imports came into force, President Claudia Sheinbaum said her state had contingency plans.

"In this situation, we request composure, serenity, and patience. We person Plan A, Plan B, Plan C, and adjacent Plan D," she said.

Sheinbaum said she would talk much astir Mexico's effect connected Tuesday.

In the US, the Dow Jones closed 1.5% little and the S&P 500 ended the time down 1.8% connected Monday, portion successful Asia connected Tuesday, the Nikkei 225 dropped 1.2% and China's Hang Seng Index was down 0.3%.

London's FTSE 100 was little successful aboriginal trading portion the main banal exchanges successful Germany and France besides dipped.

Trump has argued tariffs volition boost US manufacturing and support jobs, arsenic good arsenic raising taxation revenues and turn the economy.

However, specified measures tin person detrimental effects connected some consumers and businesses - including the ones they acceptable retired to protect.

Shoppers tin beryllium the ones who carnivore the bulk of tariffs successful the signifier of higher prices, if they're passed on, arsenic good arsenic little choice.

Meanwhile, tariffs thin to trigger retaliation from targeted countries, disadvantaging home businesses looking to export goods, meaning the measures tin yet clasp backmost trade, jobs being created and economical growth.

Andrew Wilson, from the International Chamber of Commerce, said: "What we're seeing is the biggest effectual summation successful US tariffs since the 1940s - with terrible economical risks attached to that."

"The archetypal marketplace moves are wholly reflective that we're present entering into a precise risky script for planetary commercialized and for the planetary economy," helium told BBC Radio 4's Today programme

He said Yale University had predicted these measures could outgo US households successful the portion of $2,000 successful this twelvemonth alone.

Ella Hoxha, caput of fixed income astatine Newton Investment Management, told the BBC: "In presumption of consumers, you're much apt looking at, surely implicit the abbreviated term, increases successful prices arsenic companies walk immoderate of those prices onto the consumer."

Chris Torrens, vice president of the British Chamber of Commerce successful China, added: "It's a immense situation for British concern due to the fact that of the humanities links that the UK and the US have. [We are] Seeing what looks similar the dismantling of a transatlantic confederation betwixt the US and Europe.

"But, determination is simply a existent consciousness of anticipation for a stronger UK-China relationship."