Stock markets in the Asia-Pacific region gave up early gains after President Donald Trump said he is thinking of imposing new tariffs on Mexico and Canada.
Shares opened higher after Trump pledged during his inaugural address to bring in a new “golden age” for America.
He has promised an ambitious agenda – including trade reforms, lower taxes and cuts to government regulations – which has the potential to boost company profits.
But some economists have warned that the measures may also raise inflation, which in turn could force the Federal Reserve to increase interest rates.
In morning trade, Japan’s Nikkei 225 index was about 0.4% lower, South Korea’s Kospi was up 0.6% and stocks on Australia’s ASX 200 rose by around 1%.
Meanwhile, the dollar was lower against some other major currencies, including the pound and the euro.
US markets were closed on Monday for the Martin Luther King Jr Day holiday.
During the election campaign, Trump also pledged tariffs of 10% on all imports into the US and said he would hit China with a 60% import tax.
He has said tariffs will make Americans richer, although critics say the costs are likely to be passed on to consumers.
The President has also said he would create an “External Revenue Service” to collect all tariffs, duties and revenues from foreign sources.
