Trumps US auto tariffs hit stocks as gold rises | Australian Markets

Global stock markets have fallen as shares in some of the world’s greatest carmakers tumble after US President Donald Trump introduced new tariffs on auto imports.

Trump introduced 25 per cent tariffs on all automobiles and foreign-made auto elements imported into the United States late on Wednesday, prompting heavy losses in Japanese and South Korean stocks in Asian trading in a single day.

Following the tariff announcement, US automakers misplaced ground after the bell.

General Motors slumped six per cent, whereas shares in Ford fell virtually 5 per cent, reflecting issues concerning the affect on their provide chains.

European stocks fell in early trading, with shares in Europe’s prime carmaker Volkswagen taking a hit, together with BMW and Mercedes-Benz.

The STOXX 600 hit a two-week low, down 0.5 per cent on the day at 0958 GMT.

The FTSE 100 was down 0.6 per cent and Germany’s DAX was additionally down 0.6 per cent as buyers braced for affect on Germany’s automotive sector.

Euro zone bond yields dropped, with Germany’s two-year yield hitting its lowest since March 5.

The tariffs are the latest escalation in a international trade warfare buyers concern will damage growth and will stoke US inflation.

On China, Trump stated he would possibly give Beijing some discount in tariffs to get a deal executed to promote TikTok, which helped Chinese shares outperform in Asian trading.

Japan’s Prime Minister Shigeru Ishiba stated all choices have been on the desk in response to the US tariffs.

Canada stated it may impose retaliatory duties, whereas the European Union expressed remorse however was looking for negotiated options.

Trump has repeatedly touted plans to announce reciprocal tariffs on all nations on April 2, which he has dubbed “Liberation Day”.

On Thursday, Trump stated that these tariffs shall be “lenient”.

“Uncertainty on the tariff front remains high, which is really tough for both businesses but also investors to plan into the future, and of course it’s making it really difficult for investors to price risk,” stated Baylee Wakefield, a multi-asset portfolio supervisor at Aviva Investors.

“We all know that markets hate uncertainty and we are facing it on all fronts at the moment.

“I feel that markets are going to be trading on sentiment till we have had that announcement subsequent week.”

In currency markets, the dollar index was down about 0.2 per cent at 104.47.

The euro hit a three-week low of $US1.0731 ($A1.6992) overnight before recovering to trade about $US1.0769 in early European trading.

“Perhaps the FX market is coping with tariff fatigue, and aside from already being priced in, the muted response could also be a outcome of Trump suggesting that subsequent week’s reciprocal tariffs might be fairly lenient,” ING’s global head of markets, Chris Turner, said in a note.

Gold prices rose, up 0.7 per cent on the day at $US3,040 ($A4,814) an ounce.

Goldman Sachs raised its gold price forecast on Wednesday, citing stronger-than-expected ETF inflows and sustained central bank demand.

The benchmark 10-year Treasury yield gained six basis points, to trade at 4.3964 per cent.

Oil prices fell as markets assessed the new tariffs.

Brent crude futures were down 0.4 per cent at $US73.51 ($A116.40) a barrel and US West Texas Intermediate crude futures fell 0.3 per cent to $US69.41 ($A109.91).

Concerns more tariffs may weaken the worldwide financial system, denting vitality demand, are likely to weigh on crude costs.