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U.S. stocks sank at the open on Monday, as the nation braces for a new phase of a global trade war based on tariffs.

The Dow fell over 1 percent, or 500 points. The tech-heavy Nasdaq dropped 2 percent and the broader S&P 500 index fell 1 percent.

Over the weekend, President Donald Trump's announced 

 on the United States' largest trading partners. Starting Tuesday, imports from Canada and Mexico will pay 25 percent duties and those from China 10 percent. Energy imports from Canada will be lower with a 10 percent duty. 

In a note to clients, economists from the global bank BNP Paribas said that "the announced increase in tariffs were even larger and came faster than we had pencilled in." The economists say tariffs would put the brakes on economic growth and U.S. consumer prices "should rise sharply over the coming months."

Some of the biggest losers this morning were stocks of American automakers: GM and Tesla fell 5 percent each, while Ford was off 4 percent. Automakers run a complex supply chain web between the U.S., Canada and Mexico. Many also manufacture cars in Mexico or Canada before exporting them to the U.S. 

Global stock markets also slumped, the dollar strengthened, oil prices rose.

Asian markets fell with Taiwan, South Korea and Japan performing the worst. The Nikkei Index in Japan declined by around 2.5 percent, while Hong Kong's Hang Seng dropped by 1.3 percent in early trading.

The President's tariff threats also rattled markets in Europe. The pan-European STOXX 600 index was down 1.4 percent Monday morning. Germany's DAX fell 2 percent. The FTSE 100 index, which tracks the hundred largest companies listed in London, was off 1.25 percent at the start of trading.

President Trump said Sunday night that new tariffs on the EU would "definitely happen" but suggested he may take a softer line on the U.K., saying he had a good relationship with Prime Minister Keir Starmer but that the U.K. "might" still face penalties.

The dollar meanwhile strengthened against a range of currencies including the euro, the Mexican peso and the Canadian dollar. 

Business and Economic News

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Fatima Al-Kassab

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Maria Aspan

Stock markets around the fell as President Donald Trump imposed tariffs on key trading partners, Canada, Mexico and China.

U.S. stocks, global markets fall on fears of a new trade war

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