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Asia markets, US futs fall as Trump's tariffs sparks trade

war

fears

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Trump's slaps tariffs on Canada, Mexico and China

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U.S. dlr hits record highs vs yuan; peso, Canadian dlr

tumble

By Kevin Buckland

TOKYO, Feb 3 (Reuters) - Asian stock markets slumped on

Monday and U.S. equity futures pointed sharply lower after U.S.

President Donald Trump's tariffs on Canada, Mexico and China

triggered fears of a broad trade war and hit to global growth.

The U.S. dollar shot to a record high against the Chinese

yuan in offshore trading, and jumped to the highest since 2003

against Canada's currency and the strongest since 2022 versus

Mexico's peso.

Japan's Nikkei share average tumbled as much as 2.3%

in the first minutes of trading, and Australia's benchmark

- which often functions as a proxy for Chinese markets -

also slumped more than 2%.

Hong Kong stocks open later in the day, while mainland

markets remain shut until Wednesday for Lunar New Year holidays.

Trump slapped Canada and Mexico with duties of 25% and China

with a 10% levy at the weekend, as he had threatened last month,

calling the measures necessary to combat illegal immigration and

the drug trade.

Canada and Mexico immediately vowed retaliatory measures,

and China said it would challenge Trump's levies at the World

Trade Organization.

The tariffs, outlined in three executive orders, are due to

take effect 12:01 a.m. ET (0501 GMT) on Tuesday.

Trump's move was the first strike in what could usher in a

destructive global trade war and drive a surge in U.S. inflation

that would "come even faster and be larger than we initially

expected," said Paul Ashworth of Capital Economics.

A model gauging the economic impact of Trump's tariff plan

from EY chief economist Greg Daco suggests it would reduce U.S.

growth by 1.5 percentage points this year, throw Canada and

Mexico into recession and usher in "stagflation" at home.

Barclays strategists previously estimated that the tariffs

could create a 2.8% drag on S&P 500 company earnings, including

the projected fallout from retaliatory measures from the

targeted countries.

S&P 500 futures slid 1.7%, after a 0.5% retreat for

the cash index on Friday, when the White House reiterated

Trump's plan to announce tariffs on Saturday. Nasdaq futures

slumped 2.5%, following Friday's 0.3% loss for the cash

index.

The U.S. dollar advanced 0.7% to 7.2552 yuan in the offshore

market early in Asia's morning, having earlier pushed

to the record high of 7.3765 yuan. There will be no official

onshore trading due to holidays.

The U.S. currency climbed 2.3% to 21.15 Mexican pesos

, crossing the 21-peso line for the first time since July

2022, and rose 1.4% to C$1.4755, a level not seen since

2003.

The euro plunged as much as 2.3% to $1.0125 - the

lowest level since November 2022 with Europe also potentially in

Trump's tariff crosshairs.

Japan's yen was more resilient, losing 0.2% to

155.53 per dollar.

Cryptocurrency bitcoin tumbled as much as 5.8% to a

three-week low of $96,191.39.

Oil prices rose, with U.S. West Texas Intermediate crude

up 2.4% at $74.27 a barrel and Brent crude futures

adding 1% to $76.40 a barrel.