Asian stock markets took a dive Monday after former US President Donald Trump rolled out fresh tariffs on Canada, Mexico, and China, stoking worries of another “America First” trade showdown. The move sent shockwaves through global markets, with investors bracing for potential fallout.

Japan’s Nikkei index dropped over 2% at one point, while Hong Kong’s Hang Seng fell more than 1%. South Korea’s KOSPI also slipped by over 2%. Meanwhile, China’s markets were closed for the Lunar New Year holiday but will reopen Wednesday, leaving many wondering how they’ll react.

The US dollar hit a record high against the Chinese yuan, adding to the tension. Experts predict the dollar could stay strong for a while, given the uncertainty swirling around global trade.

Trump announced the new tariffs over the weekend, with a hefty 25% duty on imports from Mexico and most Canadian goods, plus a 10% levy on Chinese products. He claims the tariffs are necessary to tackle issues like illegal immigration and drug trafficking.

Canada and Mexico wasted no time firing back with their own tariffs, and China has vowed to take the matter to the World Trade Organization. On Sunday, Trump even hinted at targeting the European Union next, accusing the EU of being “really out of line.”

The sudden escalation has left markets on edge. Analysts warn that if more countries follow suit with retaliatory measures, global trade could take a serious hit. As Trump prepares to speak with Canadian Prime Minister Justin Trudeau, all eyes are on how this trade battle will unfold.

For now, investors are holding their breath, wondering what’s next in this high-stakes economic drama.