Markets drop on Trump tariffs, world leaders await his next moves

The S&P 500 fell 1.7 per cent at the opening bell, on the heels of the year’s biggest daily losses on a string of Asian and European bourses

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Traders work on the floor at the New York Stock Exchange. Photo: AP

Published: 11:22pm, 3 Feb 2025Updated: 11:26pm, 3 Feb 2025

US stocks opened on Monday at their lowest level since Donald Trump was sworn in two weeks ago, and other global financial markets slumped after the US president ordered tariffs imposed on Canada, Mexico and China, while world leaders responded to his threats to expand tariffs to the European Union as well.

The benchmark S&P 500 fell 1.7 per cent at the opening bell, on the heels of the year’s biggest daily losses on a string of Asian and European bourses over fears of an economically damaging trade war.

Trump said his tariffs on the three largest US trading partners, which take effect on Tuesday, might cause Americans some short-term pain, but “long term, the United States has been ripped off by virtually every country in the world”.

Speaking in Washington on Sunday after returning from his Mar-a-Lago estate, Trump indicated that the 27-nation European Union could be next in line, but did not say when.

“They don’t take our cars, they don’t take our farm products. They take almost nothing and we take everything from them,” he told reporters.

President Donald Trump gestures as he arrives at Palm Beach International Airport en route to his Mar-a-Lago estate in Palm Beach. Photo: AP

EU leaders meeting at an informal summit in Brussels on Monday said Europe would be prepared to fight back if the US imposes tariffs, but also called for reason and negotiation.