Japanese stocks fell, dragging the benchmark Topix down more than 2%, as fears of global trade war spurred widespread selling in exporters such as technology companies and automakers.

A growing number of countries, including American allies, are striking trade deals as the Trump administration erects a higher fence around its global commerce.

U.S. equity futures tumbled in early Monday trading, while energy prices leaped and the dollar soared to a two-year high against its currency peers as markets reacted to the weekend tariff announcements of President Donald Trump and their potential to trigger a global trade war.

Policymakers, investors and economists are watching Trump’s trade policy amid fears that his threatened use of tariffs could batter global commerce.

U.S. President Donald Trump said on Sunday that although Britain was "out of line" when it came to trade he thought it may be able to avoid tariffs, adding of the imbalance: "I think that one can be worked out".

Trump's measures have sparked fears of a trade war which could hit the pockets of American consumers amid concern over how China and Mexico, will respond, with Canada having already announced retaliatory duties.

President Donald Trump said the sweeping tariffs that he has imposed on Mexico, Canada and China may cause "short term" pain for Americans as global markets reflected concerns the levies could undermine growth and reignite inflation.

Donald Trump’s planned tariffs on Mexico and Canada are also dealing a blow to some of the US’s closest allies in Asia.