Seerat Fatima

1 month ago | minutemirror.com.pk | Seerat Fatima

Asian auto stocks dropped on Thursday following U.S. President Donald Trump’s announcement of a 25% tariff on imported vehicles, escalating the global trade conflict and prompting retaliation threats from U.S. allies. The new tariffs, which will take effect on April 3, target cars and light trucks and come alongside existing duties on steel, aluminum, and goods from China, Canada, and Mexico. Trump plans to unveil additional reciprocal tariffs aimed at countries responsible for the U.S. trade deficit the day before. In 2024, the U.S. imported $474 billion worth of automotive products, including $220 billion in passenger cars. Key suppliers included Mexico, Japan, South Korea, Canada, and Germany—many of whom are long-time U.S. allies. European Commission President Ursula von der Leyen criticized the move, stating it was harmful to both businesses and consumers, while Canadian Prime Minister Mark Carney called it a “direct attack” on Canadian workers and announced potential retaliation measures. “We will defend our workers, companies, and country together,” Carney vowed. In Japan, automakers like Toyota and Mazda saw stock declines, as the auto sector makes up a significant portion of the country’s exports to the U.S. Shares of South Korean automakers Hyundai and Kia also fell sharply. Japanese Prime Minister Shigeru Ishiba promised to explore all options in response to the tariffs. Brazilian President Luiz Inacio Lula da Silva warned that Trump’s additional tariffs could hurt the U.S. economy by driving up prices and potentially triggering inflation. He also criticized protectionism and announced plans to file a complaint with the World Trade Organization over a steel tariff imposed on Brazil. You Might Also Like Elon Musk warns Ukraine to stop fighting or lose Starlink access Pakistani textile industry records excellent growth with 19% rise in apparel exports WHO Chief condemns deadly drone strike on Sudan hospital, urges end to attacks on healthcare Shan Masood questions accuracy of hawk-eye technology Trump has repeatedly used tariffs as a tool to offset tax cuts and revive the U.S. industrial sector, though trade experts warn the move may lead to higher prices and reduced demand in the global auto market, already facing uncertainty from ongoing tariff threats. The United Auto Workers (UAW) union, which has long opposed free trade agreements, praised the new tariffs, claiming they were a step forward for U.S. autoworkers and communities. “Now it’s up to automakers to bring back good union jobs to the U.S.,” said UAW President Shawn Fain. Following the announcement, shares of U.S. automakers, which rely heavily on supply chains in Mexico and Canada, fell in after-hours trading. U.S. equity futures also dropped, indicating a lower market opening. Brad Setser, a former U.S. Treasury official, noted that the new tariffs could increase car prices and reduce sales in the U.S. due to the heavy reliance on imported parts. The Center for Automotive Research echoed this, warning that the tariffs would likely lead to higher prices, fewer consumer choices, and potential job losses in the U.S. auto industry. Despite the tariffs, Trump’s directive includes temporary exemptions for auto parts while his administration works out the details. Since taking office, Trump has introduced and delayed various tariffs, including those on Canadian and Mexican goods and Chinese imports. Tesla, the electric car company led by Elon Musk, may also be affected, despite the President suggesting the tariffs would have a neutral impact on the company. Musk later stated on social media that the tariff effects on Tesla would still be significant.