Global Markets Rattle as Trump's Auto Tariffs Ignite Trade War

President Donald Trump's announcement of new auto tariffs has led to a sharp decline in global stocks. Asian shares dropped, with Japan and South Korea's automakers hit hard. The U.S. markets followed suit, raising fears of inflation. The dollar surged as the Federal Reserve remained vigilant.

Global financial markets experienced a downturn following President Donald Trump's unexpected announcement of new tariffs on auto imports. The move has exacerbated existing tensions in the global trade arena, prompting a decline in stocks across both Asian and U.S. markets.

Japan's Nikkei fell by 1.2%, while South Korea's KOSPI dropped 0.9%, significantly affecting major automakers like Toyota, Mazda, and Subaru, which saw significant declines in their share values. The proposed 25% tariffs are set to take effect on April 2, stirring responses from countries such as the European Union and Canada, who are considering retaliatory measures.

The U.S. saw an adverse impact on its stocks, with General Motors, Ford, and Stellantis observing notable losses. Analysts urged caution, suggesting these tariffs could add to inflationary pressures at a time when the Federal Reserve is carefully monitoring its monetary policy. In the wake of this uncertainty, the dollar achieved a three-week high, supported by stable Treasury yields.

(With inputs from agencies.)