Financial markets that had bet trade wars could be avoided are reassessing the risks of a sharp global slowdown, resurgent inflation and a pause to Federal Reserve rate cuts following Donald Trump's tariffs on top U.

The president’s trade assault, which makes no distinction between ally and adversary, is an assertion of U.S. dominance with significant risks.

Shares of automakers and megacap tech stocks bore the brunt of a wider equity pullback on Monday after U.S. President Donald Trump ordered sweeping tariffs against Mexico, Canada and China, sparking fears of a global trade war that could hit growth.

Trump knows the United States has more leverage over its neighbors than they do over his country. But exploiting that position of strength could cause a historic rupture.

Asia markets slumped on Monday after Donald Trump slapped tariffs on Canada, Mexico and China, sparking fears that another bruising ‘America First’ trade war that could hit global growth.

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.