US President Donald Trump’s 25% tariff on car imports continued to ripple through global markets with automakers on both sides of the Atlantic extending their declines.
General Motors sank 6.5% and Ford Motor Co slid 3.2% in the US, while Germany’s BMW declined 2.6% as carmakers in the US and Europe cast a pall over stock markets. The S&P 500 was down 0.4% in afternoon trading, while Germany’s DAX 30 fell 0.7%.
“Tariff uncertainty has undermined business and consumer sentiment and increased the chance of a further slowdown in economic activity,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “The move has led to threats of retaliation from the EU, Canada, Japan and South Korea.”
The knock to automakers wasn’t universal – Elon Musk’s electric vehicle maker Tesla gained 1.3% given the company makes most of its US-sold cars in California and Texas. And consumers might not feel the full brunt of the hike, with the likes of Ferrari saying it will only raise prices by as much as 10% and take the rest of the hit on its margins.
The auto tariff is a precursor to Trump’s broader reciprocal tariff programme, which he’s set to announce on April 2.
When in doubt
The heightened uncertainty about the US trade programme continued to support gold, with the precious metal’s futures price up 1.4% at US$3,065 an ounce.
Meanwhile, the US Commerce Department revised up its December quarter gross domestic product figures by 0.1 of a percentage point to an annualised pace of 2.4%, and the International Monetary Fund said it’s still assessing Trump’s tariff plans but doesn’t envision a recession for the world’s biggest economy.
The kiwi dollar traded at 57.39 US cents at 7am in Auckland from 57.35 cents yesterday.
The general unease is set to continue in the antipodes, with Australian futures pointing to a 0.3% decline for the S&P/ASX 200 index. Prime minister Anthony Albanese is expected to announce a May 3 election today, having effectively kicked off the campaign with a small tax cut revealed in this week’s federal budget.
Local data on this side of the Tasman include ANZ’s monthly consumer confidence survey and Statistics New Zealand’s filled jobs report.
Reporting by Paul McBeth. Image from Lance Asper on Unsplash.