Stock markets slumped, the dollar rallied and oil prices rose Monday as US President Donald Trump eyed more tariffs after launching trade wars with Canada, China and Mexico, heaping pressure on the global economy.

Asian equity indices mostly slid by the close, while in Europe the push lower was driven by Frankfurt with a fall of two percent around midday.

Paris shed nearly two percent as shares prices of European automakers fell sharply.

Having launched tariffs on US neighbors and China at the weekend, Trump said he would impose levies on the European Union. 

He added that non-EU member Britain would likely avoid immediate tariffs, helping the London stock market to limit losses.

"Investors fear that this trade war will result in a significant deterioration in the global economy," said John Plassard, investment specialist at Swiss asset manager Mirabaud.

There was a sharp selloff across the cryptocurrency sector, with bitcoin slumping around seven percent.

Oil prices rallied, however, as Trump's tariffs on Canada and Mexico include the commodity.

Haven investment gold slipped, having hit a fresh record above $2,800 an ounce last week.

Trump's action sees 25 percent levies on imports from Canada and Mexico and 10 percent duties on Chinese goods.

Analysts at Oxford Economics said the tariffs could see Mexican inflation surge to six percent annually, from 4.2 percent in December. The peso sank versus the dollar Monday.

Chief EY economist Gregory Daco said Canada's economy could shrink 2.7 percent this year and 4.3 percent next year.

Canada said it would file a World Trade Organization claim against the United States, while Mexican President Claudia Sheinbaum announced that retaliatory tariffs would be imposed on US products.

China's trade ministry said Beijing would take "corresponding countermeasures".

As for the EU, the bloc must show its muscle in the face of threatened tariffs, French President Emmanuel Macron warned.

"If we are attacked in terms of trade, Europe -- as a true power -- will have to stand up for itself and therefore react," Macron said as he arrived for leaders' talks in Brussels.

In Asia, the Year of the Snake started with a nasty bite for stock markets.

Tokyo, Seoul and Jakarta each shed more than two percent while Sydney, Bangkok and Wellington were each off more than one percent. 

Singapore and India also fell, while Hong Kong gave up early deep losses to end only marginally down. Shanghai remained closed for a holiday.

Taipei plunged more than three percent, with chip titan and market-heavyweight TSMC diving 5.7 percent on the first day of trade since China's DeepSeek unveiled a cheaper artificial intelligence model rivaling those of US tech giants.

Key figures around 1045 GMT

London - FTSE 100: DOWN 1.3 percent at 8,564.52 points

Paris - CAC 40: DOWN 1.8 percent at 7,811.37

Frankfurt - DAX: DOWN 1.8 percent at 21,344.59

Tokyo - Nikkei 225: DOWN 2.7 percent at 38,520.09 (close)

Hong Kong - Hang Seng Index: FLAT at 20,217.26 (close)

Shanghai - Composite: Closed for a holiday

New York - Dow: DOWN 0.8 percent at 44,544.66 (close)

Euro/dollar: DOWN at $1.0239 from $1.0363 on Friday

Pound/dollar: DOWN at $1.2310 from $1.2392

Dollar/yen: DOWN at 154.89 yen from 155.18 yen

Euro/pound: DOWN at 83.21 pence from 83.59 pence

Brent North Sea Crude: UP 1.0 percent at $76.43 per barrel

West Texas Intermediate: UP 1.9 percent at $73.88 per barrel