Tokyo stocks open down after Trump announces Mexico tariffs

Tokyo stocks open down after Trump announces Mexico tariffs

TOKYO,. Tokyo stocks opened lower today, after US President Donald Trump announced a five per cent tariff on all goods from Mexico, with shares in automakers that have Mexico plants dropping sharply.

The benchmark Nikkei 225 index fell 0.79 per cent, or 164.66 points, to 20,777.87 in early trade, while the Topix index was down 0.77 per cent, or 11.72 points, at 1,520.26.

Trump abruptly announced the tariff plan on Twitter, saying Washington would impose it from June 10 until “illegal migrants” stop coming through Mexico into the United States.

The move sent shares in Japanese automakers down sharply, with Honda dropping 3.75 per cent to ¥2,665 (RM102.30), Mazda plummeting 6.25 per cent to ¥1,071.5, Nissan down 3.66 per cent to ¥747.4, and Toyota slipping 2.54 per cent to ¥6,404.

Trump said the tariff “will gradually increase until the Illegal Immigration problem is remedied, at which time the Tariffs will be removed,” he wrote.

“Details from the White House to follow,” he added.

Hiroaki Hiwata, strategist at Toyo Securities, said many Japanese carmakers would be negatively affected by the decision because they have plants in Mexico.

The dollar traded at ¥109.26 in early Asian trade, against ¥109.61 in New York late yesterday.

Trump’s move to impose a five per cent tariff would be “disastrous,” Mexico’s under-secretary for North American affairs at the Mexican foreign ministry said, vowing to retaliate.

The threat of the fresh tariff hike overwhelmed the positive impact on the Tokyo market of rallies on Wall Street, analysts said.

In New York, the Dow ended up 0.2 per cent at 25,169.88. — AFP