Asia stocks sink, gold at record high as tariffs unnerve markets

Asian stocks slid on Friday with heavy selling in South Korea and Japan while safe-haven gold was perked at a record high as the latest tariff flare-up from US President Donald Trump stoked investor worries of an all-out trade war.

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Trump moved ahead with a 25 per cent tariff on auto imports due to kick in next week, drawing fierce criticism from politicians and industry executives across the globe and a warning from global automakers that price hikes were likely on the way.

The widening of the global trade war that Trump kicked off upon recognizing the White House’s protectionist instincts, with shares of global automakers hit particularly hard.

In Asia, Japan’s Nikkei fell nearly 2 per cent, led by sharp drops in Toyota and Honda, while South Korea’s benchmark index shed 2 per cent as “the trade industry is a pillar of both countries’ economies.

European stock futures pointed lower, with automaker-heavy Germany’s DAX futures down 0.2 per cent.

“US tariffs on auto imports are not come as a huge surprise, having been flagged for some time,” said Fred Neumann, chief Asia economist at HSBC.

“To some extent, producers can shift supply chains and production locations to mitigate these effects. At the same time, they may also be able to pass some of the price increases to US consumers, given that tariffs affect nearly all producers.”

Some automakers, including Volvo Cars, Volkswagen’s Audi, Mercedes-Benz and Hyundai, have already said they will relocate portions of their production.