Markets were cautiously optmistic after Trump took a lighter approach to China on Monday. That sentiment lasted a day.

It follows threats by Trump to levy import taxes of 25% on Mexico and Canada, accusing them of allowing undocumented migrants and drugs into the US.

U.S. President Donald Trumpon Tuesday vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports because fentanyl is being sent from China to the U.

President Donald Trump said his team was talking about a 10% tariff on China. He said the duty could take effect as early as Feb. 1. During his campaign for president in 2024, Trump called for levies upward of 60% on China.

Iron ore and most base metals fell after US President Donald Trump said that he could hit China with 10% tariffs on all imports, suggesting Feb. 1 as the possible start date.

During his presidential campaign, Trump had threatened tariffs of as much as 60% on China. After winning the polls, Trump had announced on his social media platform that they would be charging an additional 10% tariff due to the massive amounts of drugs, in particular Fentanyl, being sent into the United States.

Soybeans fell in Chicago after US President Donald Trump said he’s considering tariffs on China, stoking fresh worries of a trade war between the two biggest economies. Wheat and corn also declined.

China’s government has begun incrementally stimulating their economy, which could be a tailwind for China equities, which may have bottomed in January of last year.

Chinese stocks opened higher and the yuan strengthened in a cautious start to Tuesday, as U.S. President Donald Trump's inaugural policies suggested he will negotiate rather than immediately impose hefty tariffs on trading partners.