Choppy trading hit stock markets on Tuesday as investors digested Donald Trump’s warning that he would impose huge new tariffs on China, Mexico and Canada when he takes over as US president in January.Trump said on his Truth Social account that he would hammer the United States’ largest trading partners with tariffs in a bid to force them to curb the illegal drug trade and immigration.Wall Street was mixed at the open, following gains a day earlier on Trump’s nomination for Treasury secretary, while European markets broadly fell.”While his warnings appear to be negotiation tactics ahead of his January 20 inauguration, markets remain highly reactive to headlines, creating volatile trading conditions,” said Fawad Razaqzada, market analyst at City Index, in a note.The news dampened earlier market optimism that Trump’s pick to lead the Treasury, Scott Bessent, could temper the tycoon’s assertiveness.It fanned fears of a trade war with China and warnings that the tariffs — along with promised tax cuts — would reignite US inflation.”These are his first direct comments on tariffs and tariff levels since becoming president-elect, and they have roiled markets,” said Kathleen Brooks, research director at XTB trading group, in a note ahead of the Wall Street open.European stocks followed losses in Asia on Tuesday despite Trump excluding Europe as an immediate target for tariffs.”It is early days, and there are plenty of opportunities for Trump to direct his attention to Europe down the line,” Brooks added.The US dollar rallied against its Canadian equivalent, Mexico’s peso and the yuan.However, it dropped against the euro, pound and yen, with the latter benefiting from its status as a haven investment, analysts said.Ahead of Wall Street’s reopening, the administration of outgoing US President Joe Biden said it had finalised a $7.9 billion award to Intel, cementing part of his legacy in bringing semiconductor production to the United States.The world’s largest economy is scrambling to ease its dependence on China and other countries in Asia for these devices essential for everything from refrigerators to weapons systems.Elsewhere on Tuesday, bitcoin held above $93,000 despite falling further.A Trump-fuelled rally that had seen the world’s largest cryptocurrency surge about 50 percent to within a whisker of $100,000 has run out of steam.Oil prices rebounded slightly after Monday’s losses of around three percent, as Israel’s security cabinet prepared to vote on a proposed ceasefire in its war with Hezbollah in Lebanon.- Key figures around 1440 GMT -London – FTSE 100: DOWN 0.38 percent at 8,260.53 pointsParis – CAC 40: DOWN 0.42 percent at 7,227.01Frankfurt – DAX: DOWN 0.35 percent at 19,338.20Tokyo – Nikkei 225: DOWN 0.9 percent at 38,442.00 (close)Hong Kong – Hang Seng Index: FLAT at 19,159.20 (close)Shanghai – Composite: DOWN 0.1 percent at 3,259.76 (close)New York – Dow: DOWN 0.47 percent at 44,528.14New York – S&P 500: UP 0.24 percent at 6,001.57New York – Nasdaq: UP 0.53 percent at 19,154.92Euro/dollar: UP at $1.0497 from $1.0495 on MondayPound/dollar: UP at $1.2572 from $1.2564Dollar/yen: DOWN at 153.58 yen from 154.23 yenEuro/pound: DOWN at 83.50 pence from 83.51 penceBrent North Sea Crude: UP 0.61 percent at $72.92 per barrelWest Texas Intermediate: UP 0.71 percent at $69.43 per barrel