>> Donald Trump's new trade taxes set off a global shockwave of market turmoil Friday, investors are feeling a collective shiver over the possibility of a trade war. European markets opened down in early trade and looked set to fall, taking their cue from tumbling Asian markets, with Japan's Nikkei falling 2.5%.
Trump said Thursday he would slap a 25% tax on steel imports and 10% for aluminum as soon as next week, sending the DOW plunging more than 400 points. After that, companies linked to either metal fell in Asia, from steelmakers in South Korea and Japan, to Toyota, who said the tariffs will substantially hit cars they send to America.
Reuters' Swati Pandey followed market moves from the open in Sydney.>> So after Trump announced the tariffs on steel and aluminum imports, there was a big sell-off in share markets globally. Markets are worried because they fear this could trigger a global trade war. So if US has imposed a tariff then maybe Europe will go ahead and impose tariffs on some of the goods that come from the United States.
And perhaps some other country would do that, and this is going to impact global growth.>> It's been a whirlwind week so far in the markets and the weekend is giving more for investors to worry about.>> Already earlier this week, markets were a bit jittery after Fed chair sounded more hawkish than they were expecting.
And markets are pricing in four rate hikes by the Federal Reserve this year, compared to earlier expectations of three. As we go into the weekend we have Italian elections, and in Germany we'll get to know whether a government is formed after months of uncertainty.>> Trump's tariff plan put a stop to a recovery for the US dollar, it fell back to its lowest value versus the Japanese yen since last month's round of market turmoil.
Analysts say it's a sign traders see companies and everyday consumers losing out if Trump puts his plan into action.