Tariff Turmoil: Global Markets React to Trump's Auto Import Taxes

Global stock markets tumbled after U.S. President Trump's announcement of new auto import tariffs intensified fears of a trade war. Japanese and South Korean automakers saw significant losses. European markets are also on edge, with speculation about potential retaliatory actions from affected countries like Japan and Canada.

Global financial markets experienced a downturn following President Donald Trump's announcement of new tariffs on automotive imports, raising concerns of a possible trade war. The move sent ripples through Asian markets, with Japan's Nikkei falling by 1.2%, driven largely by declines in the automotive sector. Major automakers like Toyota, Mazda, and Subaru suffered heavy losses.

In South Korea, the KOSPI index dropped 0.7%, reflecting the substantial presence of Korean automakers in the U.S. Meanwhile, Chinese electric vehicle manufacturers Nio and Xpeng also witnessed declines. As the effects of the tariffs resonated globally, European markets braced for impact, with stock futures pointing to a downward trend.

In response to Trump's announcement, nations like Japan and Canada are considering various retaliatory measures, while the European Union is pursuing negotiated solutions. Economists warn that the tariffs could exacerbate U.S. inflation pressures as the Federal Reserve maintains its cautious stance on policy adjustments.

(With inputs from agencies.)