Shares on Asian markets tumbled in early trade on Monday as Donald Trump’s tariffs on goods from Canada, Mexico and China sparked fears of a global trade war.

Japan’s Nikkei opened down 2.9% this morning while Australia’s benchmark – often a proxy trade for Chinese markets – fell 1.8%. Stocks in Hong Kong, which include listings of Chinese companies, fell 1.1%.

“Trump’s trade war has started,” said Alvin Tan, head of Asia currency strategy at RBC Capital Markets in Singapore.

The US president has also threatened to impose steeper tariffs elsewhere, telling reporters import taxes will “definitely happen” with the European Union.

He said the UK “is out of line” on trade with the US and told reporters “we’ll see what happens”. But he said he was confident the situation “can be worked out” without tariffs.

Mr Trump is set to speak to the leaders of Canada and Mexico later but warned them against retaliating to his tariffs, saying: “We can play the game all they want.”

Over the weekend. he announced he is imposing 25% tariffs on imports from Canada and Mexico, and hit China with a 10% levy. Both Canada and Mexico hit back with retaliatory tariffs.

However, the US president returned to Washington from Mar-a-Lago on Sunday night and brushed aside the reprisals.

“I love the people of Canada. I disagree with the leadership of Canada. And something’s gonna happen there,” he said.

“If they want to play the game, I don’t mind. We can play the game all they want.”

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Mr Trump said Americans could feel “some pain” from the developing trade war – and claimed Canada would “cease to exist” without its trade surplus with the US.

In a post on his Truth Social platform: “WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”

The Trump administration has said the tariffs are aimed at stopping the spread and manufacturing of the opioid fentanyl, as well as pressuring America’s neighbours to limit illegal immigration to the US.

But it risks a trade war and higher prices for American consumers.

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Meanwhile, Canada’s high commissioner to the UK Ralph Goodale, speaking to Sky News’ Kamali Melbourne, had a warning for allies.

He said: “I would just say to our allies around the world watch this closely, you could be next, and in the meantime, stand by your friends.”

He added Mr Trump’s words were a “salesman’s pitch” and despite the historically close relationship between the countries “we don’t want to be each other”.

The boss of GB Energy has told Sky News it could take 20 years to deliver a Labour government pledge of 1,000 jobs for Aberdeen.

Sir Keir Starmer promised voters his flagship green initiative, which will be headquartered in the northeast of Scotland, would cut consumer energy bills by as much as £300.

It is one of Labour’s five key missions for this parliament after a manifesto commitment to “save families hundreds of pounds on their bills, not just in the short term, but for good”.

In his first broadcast interview, Juergen Maier, appointed by Downing Street as GB Energy’s start-up chairman, suggested this was a “very long-term project” spanning decades and repeatedly refused to say when household prices would be slashed.

“I know that you are asking me for a date as to when I can bring that, but GB Energy has only just been brought into creation and we will bring energy bills down,” Mr Maier said.

The state-owned company will not supply power to homes but it will invest in new renewable projects while attempting to attract private investors.

Aberdeen HQ ‘nervous’

Labour hopes GB Energy will help workers move from oil and gas and has pledged 1,000 jobs for Aberdeen, where the initiative will be based.

Aberdeen and Grampian Chamber of Commerce told Sky News the estimated 50,000 local people currently employed in the industry are “nervous”.

Chief executive Russell Borthwick said: “I think the [GB Energy] ambition is good. It needs some quick wins.

“Right now, this city is nervous. We need to give the industry more confidence that things are going to start moving more quickly.

“What we do have is not a great deal of progress. We’ve had a lot of positive meetings with GB Energy. I think we are really looking over the next six months for that to be delivered on.”

1,000 jobs in 20 years? ‘Absolutely’

It comes after Energy Minister Michael Shanks MP recently said the UK government had “not moved away” from an ambition of creating “over 1,000 jobs”.

Sky News pushed Mr Maier for clarity on this pledge given the looming crisis in the North Sea industry.

He said: “Great British Energy itself is going to create over the next five years, 200 or 300 jobs in Aberdeen. That will be the size of our team. I have said in the very long term when we become a major energy champion it may be many more than that.”

Pressed to define “long term”, he replied: “Look, we grow these companies. Energy companies grow over 10 or 20 years, and we are going to be around in 20 years.”

He said “absolutely” when asked directly if it could take two decades to fulfil the commitment of 1,000 jobs.

‘Huge risk of not delivering’

Unions told Sky News there is a risk of GB Energy over-promising and under-delivering.

Unite’s Scottish Secretary Derek Thomson said: “If you look at how many jobs are going to go in the northeast, if GB energy does not pick up the pace and start to move workers in there and start to create proper green jobs, then I’m afraid we could be looking at a desolation of the northeast.”

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Prospect, which represents more than 22,000 workers across the energy industry, said the current vision seems risky.

Richard Hardy, Scotland secretary, said: “I don’t want to be accused of cynicism, but I do want to see a plan.

“If what happens is that it only creates 200 or 300 jobs, then I think most people would see that as being a failure. There is a huge risk for them in not actually delivering.

“They must understand the political risk they are taking in doing this. It has to be a success for them because otherwise it is going to be a stick to beat them with.”

As Donald Trump kicks off his threatened trade war by slapping tariffs on both friends and foes alike, Number 10 is preparing for the moment he turns his attention to the UK.

The unpredictability of the returning president, emboldened by a second term, means the prime minister must plan for every possible scenario.

Under normal circumstances, the special relationship might be the basis for special treatment but the early signs suggest, maybe not.

It was never going to be an easy ride, with Sir Keir Starmer’s top team racking up years of insults against Trump when they were in opposition.

The bad feeling continued when Peter Mandelson was proposed as the UK’s new ambassador to the US – prompting speculation he might even be vetoed.

Amid all of this, the much-anticipated call between the two leaders seemed slow to take place, although it was cordial when POTUS finally picked up the phone last Sunday, with a trip to Washington to come “soon”.

It is against this slightly tense backdrop that the future of transatlantic trade will be decided, with Westminster braced for the impact of the president’s next move.

So, it’s unsurprising that as he waits, Sir Keir will spend the next few days resetting a different trading relationship – with Europe.

In this area, he is on slightly firmer ground, as the spectre of a global trade war makes European leaders want to huddle closer together to weather the storm.

And conversely, the Labour government’s track record works in their favour here, as they cash in their pro-EU credentials and wipe the slate clean after the bad-tempered Boris Johnson years.

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It is still, however, an ambitious and risky endeavour to begin the delicate process of removing some of the most obstructive post-Brexit bureaucracy.

For minimal economic benefits on both sides, the UK must convince the Europeans that they are not letting Britain “have its cake and eat it”.

At the same time, Brexiteers back at home will cry betrayal at any hint that the UK is sneaking back into the bloc via the back door.

To make it even trickier, it must all be done with one eye on Washington, because while a united Europe may be necessary in the Trump era, the prime minister will not want to seem like he is picking sides so early on.

As with so many things in politics, it’s a delicate balancing act with the most serious of consequences, for a prime minister who is still to prove himself.