Tokyo is hoping to avoid falling into the firing line after U.S. President Donald Trump followed through on his campaign promise to impose steep tariffs on three trading partners.

Japanese shares ended lower as risk-aversion gathered steam following President Trump's decision to impose tariffs on Canada, Mexico, and China. The Nikkei Stock Average finished 2.7% lower at 38520.09.

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.

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

Trump has threatened a 10% levy from 1 February - but his campaign included 60% tariffs against Chinese imports.

Donald Trump has wasted no time in making sweeping changes to US economic policy. On his first day back in the White House, on January 20, he announced a series of executive orders and threats to impose tariffs on key trading partners by February 1.

President Trump’s recent statements on trade suggest a more nuanced approach to tariffs, using them as a negotiating tool rather than an immediate economic weapon. In an interview with Fox News, Trump mentioned the possibility of tariffs as a significant tool against China,