But early euphoria was tempered somewhat after China announced levies on some imports of US goods as Washington's measures kicked in, with no news that the two sides had reached an agreement to pause.

Markets from Japan to New York were sent tumbling Monday after news at the weekend that Trump had signed off 25 percent duties against Mexico and Canada, fanning concerns for the stuttering global economy.

Hours before the tariffs were due to take effect, Trump said he had struck deals with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum on immigration and fentanyl, and would postpone the measures for a month.

Talks on final deals would continue with both countries, he added.

The tycoon added that he would hold talks with Beijing "probably in the next 24 hours" to avoid new 10 percent tariffs on Chinese imports.

However, with the deadline for the tariffs passing at 0500 GMT, China unveiled tariffs on a range of US goods, including crude, coal, liquefied natural gas, agricultural machinery, large-displacement vehicles and pickup trucks.

China, Canada and Mexico are the United States' three biggest trading partners and had warned they would retaliate.

News of the deals with Mexico and Canada saw the Mexican peso surge more than three percent -- having tumbled to a three-year low on Monday -- before paring the gains slightly. The Canadian dollar jumped more than one percent.

Asian stock markets also advanced, though unease about the lack of movement on the Chinese tariffs saw traders' early optimism fade.

Hong Kong, which rose more than three percent in the morning, was up more than one percent, while Tokyo, Seoul, Manila, Sydney, Mumbai, Bangkok, Wellington and Taipei were also in the green.

The euro and British pound extended losses after Trump warned the European Union would be next in the firing line, while he did not rule out tariffs against Britain.

"A risk is that this is the beginning of a tit-for-tat trade war, which could result in lower GDP growth everywhere, higher US inflation, a stronger dollar and upside pressure on US interest rates," said Stephen Dover, chief market strategist and head of Franklin Templeton Institute.

"At the margin, these tariffs should encourage more domestic production of goods in the United States. However, the uncertainty surrounding the permanence of these tariffs makes it challenging for companies to make informed capital investment decisions."

The volatile start to February on markets follows their rollercoaster ride last week after China's DeepSeek unveiled a cheaper artificial intelligence model rivalling those of US tech giants, sparking questions over the vast sums invested in the sector in recent years.

"One thing we can say for sure. Markets are going to remain subject to massive headline risk in coming hours... days... and years," Ray Attrill at National Australia Bank warned.

Gold spot prices held gains after spiking to a new record high of $2,830.74 on Monday, having retreated from last week's all-time peak owing to the stronger dollar and as traders sought out the metal as a safe haven from uncertainty.

- Key figures around 0530 GMT -

Tokyo - Nikkei 225: UP 0.7 percent at 38,796.51

Hong Kong - Hang Seng Index: UP 1.6 percent at 20,533.16

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.0290 from $1.0302 on Monday

Pound/dollar: DOWN at $1.2390 from $1.2407

Dollar/yen: UP at 155.08 yen from 154.80 yen

Euro/pound: DOWN at 83.00 pence from 83.03 pence

West Texas Intermediate: DOWN 1.6 percent at $72.00 per barrel

Brent North Sea Crude: DOWN 1.0 percent at $75.21 per barrel

New York - Dow: DOWN 0.3 percent at 44,421.91 (close)

London - FTSE 100: DOWN 1.0 percent at 8,583.56 (close)

dan/mtp

NATIONAL AUSTRALIA BANK

INDEX CORP.