On February 3, Asian stock markets experienced significant declines in response to US President Donald Trump's imposition of tariffs on Canada, Mexico, and China. This action raised concerns about a potential trade war and its impact on global economic growth.
As a result of the tariffs, the US dollar surged to all-time highs against the Chinese yuan, Canadian dollar, and Mexican peso, leading to devaluations in these foreign currencies.
Canada and Mexico swiftly declared retaliatory measures, while China announced its intention to dispute the tariffs at the World Trade Organization, with the implementation date set for February 4.
Economists are forecasting that Trump's tariffs could potentially reduce US economic growth by 1.5 percentage points and force Canada and Mexico into a recession, which may also affect S&P 500 earnings significantly.