Asia markets slumped on Monday after Donald Trump slapped tariffs on Canada, Mexico and China, sparking fears of another bruising ‘America First’ trade war that could hit global growth. Japan’s Nikkei plunged more than two percent at one point on Monday and Hong Kong’s Hang Seng was down more than one percent.

President Donald Trump said the sweeping tariffs that he has imposed on Mexico, Canada and China may cause "short term" pain for Americans as global markets reflected concerns the levies could undermine growth and reignite inflation.

Donald Trump hit Canada, Mexico and China with steep tariffs on Saturday, and oil and gas groups are relying more heavily on carbon offsets to reach climate targets. Plus, EU governments are exploring ways to include the UK and Norway in a “coalition of the willing” dedicated to ramping up the continent’s defence.

Investors bought dollars, sold stocks and fretted about inflation on Monday in a scramble to assess the risk of trade war after Donald Trump put tariffs on top U.S. trading partners.

Canada and Mexico ordered retaliatory tariffs on American goods in response to sweeping tariffs imposed by President Donald Trump, and businesses and consumers in both countries questioned Sunday how the new trade war might affect them.

Amid warnings of price increases, Canada moved quickly to retaliate, China said it had planned countermeasures and Mexico said it would soon unveil its response.

Donald Trump faced a backlash from business groups and some in his own Republican party after kicking off a trade war against three of the US’s largest trading partners.

President Donald Trump said Sunday that Americans could feel “some pain” from the emerging trade war triggered by his tariffs against Canada, Mexico and China, and claimed that Canada would “cease to exist” without its trade surplus with the United States.

President Donald Trump has signed an order to impose stiff tariffs on imports from Mexico, Canada and China, drawing swift retaliation from the U.S.’s North American neighbors in an emerging trade war.

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.