New Delhi, Feb 3: Global stock markets and currencies took a hit on Monday after the Trump administration imposed fresh tariffs on key trading partners, including Canada, Mexico, and China.
The Indian rupee fell on Monday morning, closing at a record low of 87.17 against the US dollar, down by 55 paise from the previous session.
The impact of the tariffs was felt across financial markets. India’s NSE Nifty 50 dropped 0.52% to 23,361.05, while the BSE Sensex declined 0.4% to 77,192.86. In the U.S., futures linked to major indexes also suffered, with the Dow Jones Industrial Average falling 1.22%, S&P 500 futures losing 1.4%, and the Nasdaq-100 sliding 1.7%.
European and Asian markets were no exception. Germany’s DAX and France’s CAC 40 lost around 2%, with auto stocks among the worst affected. London’s FTSE 100 dropped over 1%. The US dollar strengthened, hitting a record high against China’s yuan, while the Canadian dollar fell to its lowest level since 2003.
The new tariffs include a 25% duty on Canadian and Mexican exports to the U.S. and a 10% levy on Chinese goods. Canada and Mexico have vowed to impose their own tariffs in response by Tuesday, while China has promised “corresponding countermeasures” and plans to challenge the move at the World Trade Organization.
President Trump defended the tariffs, claiming they are necessary to curb illegal immigration and drug trafficking. He also signalled that the European Union could be next, stating that tariffs on EU goods would “definitely happen.”
International media reported that the auto industry saw the steepest losses, given its reliance on cross-border trade. In Japan, Toyota shares fell 5%, and Honda lost 7.2%. In Europe, Stellantis, the parent company of Chrysler, Citroën, Fiat, Jeep, and Peugeot, dropped 7%, while Volkswagen lost 6%.
Market analysts warn that the tariffs could increase inflation and force central banks to hold off on interest rate cuts, a scenario investors had been hoping to avoid. The euro also weakened, falling to its lowest level in over two years against the US dollar.
Oil prices rose following the tariff announcement, as traders speculated on how restrictions on Canada and Mexico—two of the largest oil exporters to the U.S.—would affect supply. Brent crude increased by 1% to $76.50 per barrel.
Investment experts caution that while tariffs might offer short-term economic benefits to the U.S., they pose serious long-term risks. Market watchers are now focused on Trump’s upcoming talks with Canadian and Mexican leaders, as the tariffs are set to take effect at midnight on Tuesday.
