(Bloomberg) — Asian markets are facing some pressure early Monday after US President Donald Trump proposed new tariffs on eight European countries, denting risk appetite and boosting demand for haven assets.
The pound and euro led losses among Group-of-10 currencies against the dollar in early trading, while the yen and Swiss franc edged higher. Equity futures point to declines in Japan and Hong Kong and little change in Australia when markets reopen, after US shares inched lower on Friday.
Trump said over the weekend he’d impose a 10% tariff on goods from eight European countries starting Feb. 1, rising to 25% in June unless there’s a deal for a “purchase of Greenland.” The move drew quick rebukes from European leaders, who are now poised to halt the approval of the trade agreement struck last year. Bloomberg reported that French President Emmanuel Macron may request the activation of the EU’s anti-coercion instrument – the bloc’s most powerful retaliation tool.
“The outcome of these new trade tensions is unclear, but what has long been evident is that there is no such thing as trade or tariff certainty anymore,” analysts including Carsten Brzeski, global head of macro at ING Bank, wrote in a note to clients. “What is clear is that a full-blown trade war between the EU and the US would leave only losers.”
Asian assets were already facing pressure after US stocks on Friday gave up an earlier gain to close 0.1% lower, after Trump suggested he’d nominated someone other than Kevin Hassett to succeed Fed Chair Jerome Powell. Treasuries slid across the curve as traders dialed back expectations for rate cuts, with odds lifted that former Fed Governor Kevin Warsh will be nominated to lead the Fed.
Chinese data on Monday may show the economy remained sanguine in the fourth quarter and likely capped 2025 with its weakest quarterly growth in three years. Gross domestic product is expected to gain 4.5% year-on-year in the three months to Dec. 31, slower than the 4.8% in the prior quarter, according to a Bloomberg survey.
Eyes will then shift to the European open, with the region’s equities likely to bare the brunt of any selloff, according to strategists. Deutsche Bank anticipates the fallout on the euro may ultimately be limited given the US relies on Europe for capital, while others see Trump’s salvo purely as a negotiating tactic to gain leverage ahead of the World Economic Forum at Davos this week.
“My working assumption is that an ‘off ramp’ from these threats will soon be found, and that this turns into yet another ‘TACO moment’,” Michael Brown, a strategist at Pepperstone Group in London, wrote in a note to clients. “With the fundamental bull case for risk still a resilient one, and providing that any European retaliation remains largely rhetorical, I would view equity dips as buying opportunities for now and wouldn’t be surprised to see the week’s initial FX moves fade relatively rapidly.”
In commodities, oil edged higher Friday to settle near $60 a barrel as traders weighed tensions in Iran. Gold slipped the most in two weeks.
Some of the main moves in markets:
Currencies
The Japanese yen rose 0.2% to 157.89 per dollar as of 7:00 a.m. Tokyo time The euro fell 0.1% to $1.1584 The Australian dollar fell 0.1% to $0.6674 The offshore yuan was little changed at 6.9662 per dollar Bonds
Australia’s 10-year yield advanced three basis points to 4.73% Cryptocurrencies
Bitcoin was little changed at $95,343.95 Ether rose 0.8% to $3,337.5 ©2026 Bloomberg L.P.
