Stocks Skid, Dollar Nears 3-Week Top as Trump Announces Auto Tariffs
Asian shares skidded alongside Wall Street on Thursday, while the dollar hovered near a three-week high following U.S. President Donald Trump’s announcement of new tariffs on all auto imports. The move escalates a global trade war and raises concerns about inflation.
Market Reactions
Japan’s Nikkei fell 1.2%, with automakers like Toyota and Mazda seeing significant losses. South Korea’s KOSPI dropped 0.7%, and Chinese EV makers also faced declines. European stock futures and Wall Street futures were similarly in the red.
Expert Analysis
Analysts suggest the timing of the announcement caught markets off guard, though the content was somewhat anticipated. “The real question now is how key trading partners like the EU, Japan, and South Korea will respond,” said Tony Sycamore, an analyst at IG.
Economic Implications
Trump’s tariff plans could stoke U.S. inflation, complicating the Federal Reserve’s monetary policy. St. Louis Fed President Alberto Musalem noted the potential for higher inflation and slower growth, while Minneapolis Fed President Neel Kashkari emphasized the need for caution amid policy uncertainty.
Global Currency and Commodity Markets
The dollar index rose to a three-week high, while gold prices edged closer to record levels. Oil prices also saw marginal gains amid concerns over tighter global supply.
For more details, read the full Reuters article here.