May 31, 2019: Asian stocks edged down Friday, despite modest gains on Wall Street overnight, as US President Donald Trump's sudden announcement of tariffs on all Mexican imports saw Tokyo shares drop.
Trump's Twitter announcement of a five percent tariff on all goods from Mexico starting June 10 sent shares in automakers with plants in the North American country falling sharply.
Trump said the duties would gradually increase until “illegal migrants” stop coming into the United States through Mexico.
Mexico's under-secretary for North American affairs called the move “disastrous” and vowed to retaliate.
The announcement saw shares in Japanese automakers plunge in early trade, with Honda dropping 4.26 percent to 2,651 yen, Mazda plummeting 7.13 percent to 1,061.5 yen, Nissan down 5.31 percent to 734.6 yen, and Toyota slipping 2.84 percent to 6,384 yen.
Tokyo's main index fell 1.6 percent, while Hong Kong shed 0.8 percent. Shanghai edged down 0.2 percent and Singapore lost 0.8 percent. Sydney and Seoul managed a 0.1 percent gain.
European stocks also tumbled at the open, with London slipping 0.7 percent. Frankfurt shed 1.3 percent and Paris retreated 1.0 percent.
Trump's announcement has put the new North American trade pact between the US, Canada and Mexico at risk — with the agreement still awaiting ratification by the legislatures of the three countries.
In a letter to Trump after the announcement, Mexican President Andres Manuel Lopez Obrador struck a conciliatory tone.
“I express to you that I don't want confrontation,” he wrote. “I propose deepening our dialogue, to look for other alternatives to the migration problem.”
