Hong Kong: Asian markets fell on Friday as fears of a trade war blasted back to the fore after Donald Trump imposed stiff tariffs on European, Mexican and Canadian steel and aluminium.
The move sparked immediate countermeasures by Mexico and Canada, while the European Union threatened a similar response, throwing up the prospect of a painful conflict between some of the world's biggest economies.
French President Emmanuel Macron labelled the move "illegal".
It also overshadowed news that Italy's populist parties had reached a deal to revive a coalition government and avoid a snap election that many had feared could be used as a referendum on the country's euro membership.
"While markets overreacted to the Italian mess a couple of days back, it strikes me they might be under-reacting to the real -- distractive -- negatives of this trade skirmish developing into a trade war," said Greg McKenna, chief market strategist at AxiTrader.
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