In a new step within the protectionist trade policies pursued by U.S. President Donald Trump, a 25% tariff on imported cars was announced. This move escalates the global trade war, leading to a sharp decline in Asian car markets, which consider the U.S. as one of their most important markets. The U.S. imported significant amounts of cars and related products in 2024, making these tariffs a major blow to economies dependent on car exports to America.
From a technical perspective, the stock markets saw a noticeable decline in major companies such as Toyota and Mazda in Japan, and Hyundai and Kia in South Korea, due to these new tariffs. U.S. companies also felt the impact, especially in light of their deep integration with factories and suppliers in Mexico and Canada. This pressure threatens to reduce the profits of car manufacturers in the short term.
Economically, forecasts suggest that these tariffs will lead to higher prices for American consumers, which will affect the demand for new cars and reduce consumer options. According to analysts, this will have a long-term effect on the global market, potentially leading to a broader economic slowdown in the affected sectors.
Although Trump views these tariffs as a tool to increase revenue and stimulate the U.S. industry, experts warn that this could lead to a long-term economic slowdown due to higher costs for consumers and businesses. Meanwhile, many affected countries, such as Canada and the European Union, are considering retaliatory measures that may escalate the trade war further.
On another front, gold prices saw a significant rise in Asian trading on Thursday, due to increased demand for safe-haven assets following Trump’s announcement of a 25% tariff on all car imports. This move marked an escalation in his trade strategy, and the market became increasingly concerned that more trade threats might come to fruition, driving traders toward gold as a risk hedge.
Moreover, Goldman Sachs raised its gold price forecast for the end of 2025 to $3,300 per ounce, with expectations of continued inflows into exchange-traded funds supported by strong demand from central banks, particularly in emerging markets and Asia. With continued demand for gold as a hedge against economic fluctuations, prices are expected to reach unprecedented levels, potentially exceeding $3,600 per ounce by the end of 2025, reflecting the strong technical and economic performance of the yellow metal in the coming period.
The German government and the German automotive industry association criticized the new tariffs imposed by U.S. President Donald Trump on car imports, arguing that this step would harm both the European and U.S. economies. German Economy Minister Robert Habeck called for a firm response from the European Union, emphasizing the need for urgent negotiations to avoid further escalation of the global trade war.
These tariffs have notably affected the stock markets, with shares in Volkswagen, the most affected due to its significant ties to Mexico, dropping by 5.1% in pre-market trading. Shares of companies like Mercedes-Benz, BMW, and Daimler also fell by around 3.5%, while shares of components supplier Continental dropped by 2.9%.
Despite these concerns, a study by the IfW economic institute showed that Germany would not be the most affected by the tariffs, with the German GDP expected to decrease by 0.18% in the first year after the implementation of the tariffs, compared to a larger impact on Mexico’s economy of 1.81%.
In Asia, markets saw significant declines due to Trump’s tariffs, raising widespread concerns about their impact on the U.S. trade agenda. Japanese stock markets were the most affected due to the Nikkei’s heavy concentration in automakers and tech, while Chinese markets remained more stable.
The technology and semiconductor sectors were also notably impacted by concerns over a potential oversupply in data center infrastructure and AI. Shares in major companies like TSMC and Hon Hai dropped by up to 2.4%, while SK Hynix’s shares in South Korea fell by about 2%, following reports suggesting a decline in demand for AI-related data center services.
