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The Nikkei 225 has plummeted more than 4 per cent overnight, amid a global market panic as investor and consumer confidence drops ahead of the next stage of Trump tariffs.
The Japanese index fell 4.1 per cent to 35,615.15.
Meanwhile, Hong Kong’s Hang Seng dipped 1 per cent to 23,200.65, while South Korea’s Kospi sank 2.6 per cent to 2,492.49.
The Australian ASX 200 declined 1.6 per cent to 7,856.80.
Elsewhere, Thailand’s SET index dropped 0.9 per cent following the powerful earthquake in Myanmar.
Gold prices surged past $3,100 to another record high, as nervous investors seek safe bets away from febrile stock markets.
This fresh bout of market wobbles comes ahead of Trump’s so-called ‘Liberation Day’ on 2 April.
From Wednesday, new 25 per cent tariffs on all automotive imports into the US will kick in. Top Japanese carmakers Toyota, Honda and Nissan all saw their shares dip after Trump announced the levies last week.
Trump’s latest trade taxes have sparked fears of stagflation – with the US economy braced for stagnant growth and higher inflation.
The US president told NBC News on Sunday that he “couldn’t care less” if car prices rise as a result of his tariffs.
“People are going to start buying American-made cars,” he added.
Analysts warn that the risk of a US recession is significantly elevated as a result of the trade war.
Goldman Sachs has predicted that aggressive levies will bring US economic growth essentially to a halt, expecting inflation to hit 3.5 per cent – significantly higher than the Fed’s 2 per cent target.
The investment bank is projecting a 35 per cent chance of inflation within the next year.
Meanwhile, figures from last week showed that even ahead of the tariffs, the UK automotive industry has been struggling – with production of cars and commercial vehicles seeing an 11.6 per cent drop.
