US President Trump suddenly announced a 25% tariff on imported cars, like dropping an economic bomb on the global market. Allies such as Canada, the European Union, and Japan quickly showed a counterattack posture, causing severe fluctuations in overseas stock markets and panic among multinational car companies. A global trade confrontation officially kicked off, and gold once again gained the favor of safe haven funds. Spot gold hit a record high of $3059.35 per ounce on Thursday (March 28).

Tariffs are cutting at the automotive industry, with consumers bearing the brunt

The new tariff policy will take effect on April 3, directly pushing up car prices in the US market, which goes against Trump's previous promise to "reduce the cost of living". Ferrari announced a 10% increase in interest rates, and other car companies followed suit with warnings. Distributors are concerned about a sharp drop in sales and a surge in unemployment risks. As the main source countries of US car imports, Mexico, Japan, Germany and others will export up to $474 billion to the US in 2024. This tariff is no different from a "precise blow" to the economies of allies.

Allies are furious, retaliation is imminent

Canadian Prime Minister Carney vows to 'turn crisis into opportunity', while the EU harshly criticizes new tariffs as' harming businesses and consumers'. German car companies' daily market value evaporated by billions of euros, prompting Japan and South Korea to urgently formulate countermeasures. Tesla and other domestic American car companies' stock prices rose against the trend, while General Motors and Ford, which rely on global supply chains, suffered heavy losses, highlighting the cruel reality of the trade war due to market differentiation.

Trump's' America First 'policy escalates again, WTO suffers

The US government has suspended payment of membership fees to the World Trade Organization (WTO), further weakening the global trading system. Trump insists that tariffs can "revive American manufacturing," but economists warn that short-term price increases and shrinking demand will hit the automotive industry hard. He even spoke harshly on social media, threatening to impose "larger tariffs" if allies join forces to retaliate, intensifying the tension.

Gold prices hit a new historical high

The trade war ignited by car tariffs has spread from the economic field to the international political stage. The strong counterattacks from allies, the drastic fluctuations in the market, and the immediate losses suffered by consumers all indicate the long-term and destructive nature of this confrontation. At a critical moment of global economic recovery, Trump's tariff policies are pushing the world into a more dangerous trade abyss.

Gold prices hit a record high of $3059.35 per ounce on Thursday, closing at $3056.68 per ounce as investors sought safe haven assets amid escalating global trade tensions and stock market crashes. On Friday in the Asian market, spot gold is currently trading around $3054.33 per ounce.

Bob Haberkorn, Senior Market Strategist at RJO Futures, said, 'The main catalyst is safe haven buying,' driven by the uncertainty surrounding Trump's tariff plan.

Phillip Streible, Chief Market Strategist at Blue Line Futures, stated that strong central bank inflows and ETF demand have also provided support for gold.

After the Federal Reserve decided to keep the benchmark interest rate unchanged last week, investors are currently waiting for the release of US personal consumption expenditure data on Friday to determine the trajectory of further interest rate cuts.