European and Asian shares were mostly lower Tuesday after a new round of tariffs imposed by US President Donald Trump took effect.
China hit back at Washington's move to raise tariffs by 20 per cent across the board with higher duties of up to 15per cent on US farm exports.
Germany's DAX slipped 1.8 per cent to 22,733.26 while in Paris the CAC 40 declined 1.1per cent to 8,108.71. Britain's FTSE 100 lost 0.4per cent to 8,837.92.
The future for the S&P 500 rose 0.1 per cent while that for the Dow Jones Industrial Average was unchanged.
In Asian trading, Tokyo's Nikkei 225 dropped 1.2 per cent to 37,331.18, while the Hang Seng in Hong Kong lost 0.4per cent to 22,922.16. The Shanghai Composite index edged 0.2 per cent higher to 3,324.21.
South Korea's Kospi gave up 0.2 per cent to 2,528.92. Taiwan's Taiex shed 0.7 per cent, while Bangkok's SET lost 1.1 per cent.
On Monday, the S&P 500 dropped 1.8per cent after Trump said there was “no room left” for negotiations that could lower the tariffs that took effect Tuesday for imports from Canada and Mexico. Trump had already delayed the tariffs once before to allow more time for talks.
The Dow dropped 1.5 per cent and the Nasdaq composite slumped 2.6 per cent.
The Chinese tariffs on American beef, corn, soy and other farm products announced Tuesday expanded the potential impact of Trump's trade tactics, said Francis Lun, CEO of Geo Securities in Hong Kong.
“I don't think China will buy any more US farm products. The orders will go to South America,” Lun said. "I think all in all, it's a lose-lose situation. Nobody gains anything.”
Investors had hoped Trump would choose a less painful path for global trade. Monday's loss shaved the S&P 500's gain since Election Day down to just over 1 per cent from a peak of more than 6per cent. That rally had been built largely on hopes for policies from Trump that would strengthen the US economy and businesses.
After the S&P 500 set a record last month following a parade of fatter-than-expected profit reports from big US companies, the market began diving following weaker-than-expected reports on the US economy, including a couple showing U.S. households are getting much more pessimistic about inflation because of the threat of tariffs.
The latest such report arrived Monday on US manufacturing. Overall activity is still growing, but not by quite as much as economists had forecast. Perhaps more discouragingly, manufacturers are seeing a contraction in new orders. Prices, meanwhile, rose amid discussions about who will pay for Trump's tariffs.
The market's recent slump has hit Nvidia and some other formerly high-flying areas of the market particularly hard. They fell even more Monday, with Nvidia down 8.8 per cent and Elon Musk's Tesla down 2.8 per cent.
In other dealings early Tuesday, US benchmark crude oil lost 93 cents to $67.44 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude gave up $1.10 to $70.52 per barrel.
The US dollar slipped to 149.86 Japanese yen from 149.50 yen. The euro rose to $1.0519 from $1.0488.
Bitcoin fell to about $83,900, according to CoinDesk, down 8.7 per cent.
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