U.S. President Donald Trump’s announcement of high tariffs on Canada, Mexico, and China has rattled Asian stock markets, with investors bracing for trade surplus nations in the region to be his next targets.

South Korea’s Kospi dropped 2.52 percent to close at 2,453.95 on Monday, slipping below the 2,500 threshold. Japan’s Nikkei 225 fell 2.66 percent, while Taiwan’s TAIEX plunged 3.53 percent.

The Kospi’s decline was led by major exporters heavily reliant on the U.S. market, including semiconductor, battery, and auto stocks. Samsung Electronics Co. slid 2.67 percent, while Kia Corp., the worst performer among the top ten by market capitalization, tumbled 5.78 percent. Kia exports 62 percent of the 620,000 vehicles produced at its Mexico plant to the United States, and a potential 25 percent tariff on Mexico could erode its price competitiveness.

In Japan, Toyota Motor Corp. fell 5.01 percent, highlighting broader losses among major U.S.-focused exporters.

“Hopes that Trump’s second-term tariffs would be milder than expected have faded, fueling market volatility,” Shinyoung Securities Co. analyst Park So-yeon said. “With Canada and other countries stuck in political deadlocks, effective responses are difficult, and market stability is unlikely before late March [2025].”

Monday’s slump was also driven by a stronger U.S. dollar, as tariff concerns spurred demand for safe-haven assets, weakening Asian currencies and further weighing on stock markets. The Korean won fell to 1,467.2 per dollar, down 14.5 won from the previous session, hitting its lowest level in three weeks since January 13 (1,470.8 won).

“Global trade tensions are now priced into the market, and the won may stay below 1,450 for some time,” Hana Bank senior researcher Seo Jeong-hoon said.

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