Global Ripples: Trump's Auto Tariff Sparks Tension

U.S. President Trump's announcement of a 25% tariff on imported vehicles has sparked global unease, affecting auto stocks and prompting criticism from allies. The move aims to counter the U.S. trade deficit but faces backlash from global automakers and economists fearing higher consumer prices and job losses.

Asian auto stocks took a hit on Thursday following President Donald Trump's revelation of a new 25% tariff on imported vehicles, a move positioned within a broader global trade war. The tariff announcement drew sharp criticism and threats of retaliation from close U.S. allies.

The tariffs, targeting cars and light trucks, take effect post April 3, coinciding with reciprocal tariffs aimed at resolving the U.S. trade deficit issue. This comes alongside existing tariffs on steel, aluminum, and various goods from nations like Mexico, Canada, and China.

Global economic leaders, including the European Commission and Canadian Prime Minister, have condemned the tariffs, citing potential harm to consumers and businesses. Automakers fear rising costs and decreased demand, with significant impacts anticipated on both global and U.S. domestic automotive markets.

(With inputs from agencies.)