As Trump slaps new tariffs on auto imports, markets tremble—will this ignite a full-blown trade war?
Asian stocks took a sharp dive on Friday as US President Donald Trump announced a 25% tariff on auto imports, set to take effect next week.
The move sent shockwaves through global markets, with Japan’s Nikkei dropping over 2% and South Korea’s benchmark index hitting a two-week low. Meanwhile, investors rushed to safe-haven assets, pushing gold to a record high.
Automakers Hit Hard
The auto industry, a key pillar of Japan and South Korea’s economies, bore the brunt of the sell-off. Shares of Toyota and Honda plummeted, while global carmakers like Volvo, Audi, and Hyundai announced plans to shift production or raise prices. Ferrari even warned of a 10% price hike on some models.
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Trade War Fears Grow
Trump’s latest move has reignited fears of a widening trade war, which began when he returned to the White House. Analysts warn that tariffs could slow global growth and fuel inflation. “This is a double whammy—growth-restraining and inflation-producing,” said Thierry Wizman of Macquarie.
Gold Shines, Dollar Struggles
As uncertainty looms, gold prices surged by 17% this quarter—the best performance since 1986. Meanwhile, the dollar weakened amid concerns over US economic growth, while the yen gained strength on expectations of a Bank of Japan rate hike.
What’s Next?
All eyes are now on April 2, when the US is expected to announce reciprocal tariffs. With Trump hinting at unconventional measures, markets remain on edge. Will this escalate into a full-blown trade war, or can economies adapt?
Also Read: Thailand Moves to Halve $35B Trade Surplus With US—What’s the Real Cost?
