Global stocks plunged on Monday morning after President Donald Trump announced wide-reaching tariffs on America’s largest trading partners. 

The S&P 500 was down around 1.8 percent in the first hour of trading, and the tech-heavy Nasdaq was 2.4 percent lower.  

Trump announced tariffs of 25 percent on Canada and Mexico over the weekend. 

Mexico says it has negotiated for the tariffs, initially meant to be implemented on Tuesday, to be delayed for a month. 

Canada’s Prime Minister Justin Trudeau is set to hold a second call with Trump at 3pm, as eleventh-hour negotiations continue. 

US carmakers, heavily dependent on supply chains in Mexico and Canada, are among the businesses facing declines on Wall Street. General Motors has seen a 5.3 percent drop, Tesla is down 4.5 percent, and Ford has experienced a decline of over 3 percent.

Both countries have promised to retaliate with their own tariffs on US goods if Trump’s measures go into effect. 

Trudeau pledged 25 percent tariffs on $106 billion worth of US goods at a press conference on Saturday. 

Trump, pictured at the New York Stock Exchange in December, has announced sweeping tariffs on the US’s largest trading partners and neighbors 

Mexican President Claudia Sheinbaum said she will outline her own measures on Monday. 

If the tariffs are implemented in full they could push Mexico and Canada in to recession, Morgan Stanley has warned.  

Trump has also announced a 10 percent tariff on China, and the country has vowed ‘corresponding countermeasures’ but has not released the details. 

Trump said he may raise tariffs higher against countries that bring in retaliatory measures.  

The rationale behind these tariffs, according to the president, is to compel countries to rebalance their trade relationships with the United States, while also aiming to address issues such as illegal immigration and drug trafficking into the country.

Trump has indicated that for the tariffs to be removed, affected nations must take steps to control the flow of people entering the US illegally. He emphasized the need to curb the influx of individuals and substances like fentanyl, citing China as one of the countries that need to address these concerns.

Trump has also threatened the EU with similar measures, and said trade with the UK is ‘out of line’ but a deal ‘can be worked out.’

The Stoxx Europe 600, representing the biggest companies across the continent, was down 1.4 percent in morning trading. 

Trudeau pledged 25 percent tariffs on US goods at a press conference on Saturday

Mexican President Claudia Sheinbaum has promised retaliation but has not revealed details 

Crypto is also performing badly with around $600bn wipes off its global markets since Saturday, the Financial Times reports. 

Asian markets have also been hit by the turbulence with Taiwan, South Korea and Japan seeing their stock markets fall. 

Economists have warned that a trade war could push up inflation and threaten growth, the Wall Street Journal reported. 

Hedge funds are also making a multi-billion-dollar gamble against the US economy.

Major funds are betting Donald Trump’s presidency will result in a massive market crash that could devastate 401(k)s, pensions, and household savings across America. 

Data from Goldman Sachs has sent shockwaves through financial circles, revealing a dramatic surge in ‘short’ positions against US stocks – a move that signals a belief the market is headed for a precipitous crash. 

Throughout January, investors placed 10 times more bets on American stocks falling than on their continued rise, a staggering shift that reflects growing unease over Wall Street’s future under Trump’s leadership.