Asia: Markets mixed as autos suffer more tariff-fuelled losses

Asian Markets Mixed as Traders Prepare for US Tariffs

Mood on Trading Floors Soured

Asian markets were mixed on Friday as traders braced for next week’s expected wave of US tariffs, while auto firms extended their painful losses following President Donald Trump’s announcement of steep levies on vehicle imports.

Global Trade War Fears

Governments around the world have hit out at the announcement, with Canadian Prime Minister Mark Carney saying the "old relationship" of deep economic, security, and military ties with Washington "is over." But warnings of retaliation have stoked worries of a long-running global trade war and a reignition of inflation that could force central banks to rethink plans to cut interest rates.

Uncertainty Among Investors

Uncertainty over Trump’s plans and long-term intentions has led to uncertainty among investors, sparking a rush out of risk assets into safe havens such as gold, which hit a new record high of US$3,066.56 on Friday.

Analysts’ Views

Analysts said that while there is hope negotiations with Washington could see the duties tempered, investors were likely choosing to play a wait-and-see game.

Asian Markets Mixed

After another down day on Wall Street, equity markets in Asia were mixed on Friday, with auto firms again taking the brunt. Tokyo sank more than two per cent, with Toyota, Honda, Nissan, and Mazda tumbling between 1.5 and 3.9 per cent.

US Economic Data

Investors will be keeping a close eye on the release later in the day of US personal consumption expenditures data – the Federal Reserve’s preferred gauge of inflation – hoping for an idea about the impact of Trump’s policies. The figures come after data this week showed consumer confidence was at its lowest level since 2021 – during the pandemic – owing to growing concerns over higher prices.

Conclusion

As the world awaits the next move from the Trump administration, markets are likely to remain volatile. With hopes of negotiations and fears of retaliation, investors are keeping a close eye on the developments.

FAQs

Q: What is the impact of US tariffs on Asian markets?
A: Asian markets are likely to be affected by the US tariffs, with auto firms particularly hard hit.

Q: What is the current mood on trading floors?
A: The mood is soured, with investors bracing for the expected wave of US tariffs.

Q: What is the impact of Trump’s announcement on global trade?
A: The announcement has sparked fears of a long-running global trade war and a reignition of inflation.

Q: What is the current state of the US economy?
A: The US economy expanded at a slightly faster pace than estimated in the final three months last year, but consumer confidence is at its lowest level since 2021 due to growing concerns over higher prices.