Asian shares fall after Wall St retreats on fears over hit to the US economy from Trump's tariffs

BANGKOK (AP) — Shares opened lower Tuesday in Asia after U.S. stocks fell sharply just ahead of a new round of higher tariffs imposed by U.S. President Donald Trump.

Tariffs of 25% on Canada and Mexico were due to take effect early Tuesday. An extra 10% tariff is being imposed on China. On Monday, Beijing hinted via state media reports that it was planning retaliation that might at least partly focus on U.S. farm products and food exports. China is a major importer of U.S. soybeans and other agricultural products.

Tokyo's Nikkei 225 dropped 1.9% to 37,084.83, while the Hang Seng in Hong Kong lost 1.6% to 22,666.68. The Shanghai Composite index edged 0.2% to 3,310.35.

In South Korea, the Kospi edged less than 0.1% higher, to 2,533.77. Taiwan's Taiex shed 0.9%, while shares in most of Southeast Asia also fell.

On Monday, the S&P 500 dropped 1.8% to 5,849.72 after Trump said there was “no room left” for negotiations that could lower the tariffs set to begin Tuesday for imports from Canada and Mexico. Trump had already delayed the tariffs once before to allow more time for talks.

The Dow Jones Industrial Average dropped 1.5% to 43,191.24, and the Nasdaq composite slumped 2.6% to 18,350.19.

Trump’s announcement dashed hopes on Wall Street that he would choose a less painful path for global trade, and it followed the latest warning signal on the U.S. economy’s strength. Monday's loss shaved the S&P 500's gain since Election Day down to just over 1% from a peak of more than 6%. That rally had been built largely on hopes for policies from Trump that would strengthen the U.S. economy and businesses.

After the S&P 500 set a record last month following a parade of fatter-than-expected profit reports from big U.S. companies, the market began diving following weaker-than-expected reports on the U.S. 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 U.S. 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 yield on the 10-year Treasury fell to 4.16% from 4.24% just before the manufacturing report’s release. It’s come down sharply since January, when it was approaching 4.80%, as worries have built about the possibility of a slowing U.S. economy.

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% and Elon Musk’s Tesla down 2.8%.