Asian markets took a hit on Monday as fresh tariffs announced by former US President Donald Trump set off alarm bells about another potential trade war. The move, targeting imports from Canada, Mexico, and China, has raised concerns about its impact on global economic growth.

Japan’s Nikkei index dropped over 2%, while Hong Kong’s Hang Seng slid more than 1%. South Korea’s KOSPI also saw a significant dip, losing 2% at one point. Meanwhile, Chinese markets remained closed for the Lunar New Year holiday, with trading set to resume on Wednesday.

The US dollar surged to a record high against the Chinese yuan, adding to the unease. Analysts noted that Trump’s latest move signals the start of a new trade conflict, with little relief in sight for the affected economies.

Over the weekend, Trump unveiled plans to impose a 25% tariff on all imports from Mexico, most goods from Canada, and a 10% duty on Chinese products. These measures, aimed at curbing migration and fentanyl trafficking, are set to take effect on Tuesday.

In response, Canada and Mexico have already announced their own retaliatory tariffs, while China has vowed to challenge the move at the World Trade Organization. Trump also hinted at additional tariffs on the European Union, accusing the bloc of unfair practices.

The swift backlash from trading partners has left markets on edge. Experts warn that this could lead to a sharp decline in global trade, further straining an already fragile economic landscape. As tensions escalate, the world watches closely to see how this unfolding trade drama will impact growth and stability.