Japanese automakers’ shares tumbled after US President Donald Trump pledged to impose tariffs against Canada and Mexico, with investors worried their operations may be upended considering many have factories south of the border from where they send cars into North America.

The Trump administration claims it’s levying the new tariffs on Canada, Mexico, and China to stop the flow of illegal drugs into the US. Often, presidents use tariffs as a threat during trade negotiations or to protect domestic industries from cheaper foreign products (as the Biden administration did with electric vehicles from China).

Mexico, Canada, China, and Democratic lawmakers in the U.S. have all responded to the new tariffs ordered by President Trump set to go into effect later this week. NBC News' Yamiche Alcindor reports on the new trade war taking shape.

Japanese carmakers’ shares fell after US President Donald Trump imposed tariffs against Canada and Mexico, threatening to upend their operations in North America.

Global markets buckled up for a turbulent session on Monday after U.S. President Donald Trump launched a trade war with sweeping tariffs on Canada, Mexico and China that threaten to undermine economic growth and reignite inflation.

The invoking of national security to unravel trade agreements could scramble the international trading system in China’s favor.