Japanese auto stocks fell sharply after new U.S. tariffs against Mexico, Canada and China raised concerns about their U.S. sales of cars made in the North American trading partners and a further escalation in trade conflicts.

Policymakers, investors and economists are watching Trump’s trade policy amid fears that his threatened use of tariffs could batter global commerce.

Asia shares are mostly declining as worries grow about President Donald Trump imposing tariffs on key U.S. trading partners

Investors are bracing for a potential trade war that could hit the earnings of major companies and dent global growth. Canada and Mexico have said that they will hit back with retaliatory tariffs while China promised to respond with "corresponding countermeasures" and vowed to challenge Trump's move at the World Trade Organization.

Asian stocks plunge as Trump’s tariffs spook markets Stock markets in Asia dropped on Monday after US tariffs on China, Canada and Mexico triggered fears of a hit to global growth. Japan's Nikkei index tumbled as much as 2.