Trump swings the tariff stick again, imposing a 25% tariff on all imported cars, causing waves in the gold market

On March 26th local time, there was a sudden change in the situation at the White House. US President Trump signed an executive order announcing the imposition of a 25% tariff on all imported cars. This policy will officially take effect on April 2nd and will be implemented from April 3rd onwards. As soon as the news came out, the global financial market and automotive industry shook, and the gold market also rippled.

Analysis of Tariff Policy Content

According to documents released by the White House, the tariffs were implemented under Section 232 of the Trade Expansion Act of 1962 under the guise of “national security”. The scope of taxation covers imported passenger cars, SUVs, and light trucks, as well as key automotive components such as engines and transmissions, which may be further expanded to other components in the future. However, under the framework of the USMCA agreement, car importers can only impose tariffs on non US made parts of their products if they can prove that their products contain US made ingredients. Trump emphasized that this move will encourage more car production to return to the United States, open up new sources of revenue for the government, and help reduce national debt.

Global industrial chain turbulence and multi-party countermeasures

The stock prices of American car manufacturers experienced significant fluctuations on the same day, with General Motors’ stock price falling by about 3%, Ford Motor’s stock price remaining basically unchanged, and the stock price of Brandeis Group, which owns Jeep and Chrysler brands, falling by nearly 4%. Gary Hufbauer, a senior researcher at the Peterson Institute for International Economics and former Treasury official, bluntly stated that the tariff policy is a “significant blow” to the automotive industry, and the soaring cost of cars will suppress market demand, especially in the current situation of poor consumer financial conditions. American automotive and parts companies may face a crisis of “massive layoffs”.

US allies quickly counterattacked. Canadian Prime Minister Carney spoke strongly, calling this a “direct attack” on Canadian workers, and the Canadian government will quickly study countermeasures, not ruling out retaliatory tariffs. The European Commission also quickly responded by announcing retaliatory tariffs on US goods worth 26 billion euros (1 euro is about 1.09 US dollars). President of the European Commission von der Leyen stressed that the automotive industry is of great significance to innovation, competitiveness and high-quality employment. The European and American supply chains are deeply integrated, and additional tariffs are detrimental to both American and European enterprises and consumers. Hildegard M ü ller, President of the German Association of Automobile Manufacturers, issued a statement stating that the tariff measures send an “extremely negative signal” to global free and rule-based trade, which will severely impact businesses and the global automotive supply chain, have a negative impact on consumers, and also harm the economic growth and prosperity of the United States itself. Brazilian President Lula also stated that in the face of Trump’s tariff measures, Brazil will not “sit idly by” and will take measures that are beneficial to the country.

The gold market fluctuates widely

At a time when the global trade situation is fluctuating due to automobile tariffs, the gold market has also been significantly affected. On March 26th, impacted by the news, the gold price hit bottom and rebounded, maintaining its volatility. COMEX gold futures rose slightly by 0.02% to $3026.6 per ounce.

Analysts point out that Trump’s imposition of car tariffs is highly likely to exacerbate global trade tensions and significantly boost market risk aversion. As a traditional safe haven asset that has stood the test of time, gold is likely to attract a large influx of funds, which in turn will drive short-term price increases. Once major trading partners such as the European Union and Canada take strong countermeasures and trade frictions continue to escalate, gold prices are expected to receive stronger support. At present, the market’s risk aversion sentiment has risen, as evidenced by the net inflow of gold fund ETFs exceeding 460 million yuan for five consecutive days.

Trump’s decision to impose a 25% tariff on imported cars has brought great uncertainty to both the global automotive industry and the gold market. The follow-up market will closely monitor the specific impact of the policy that officially takes effect on April 2nd, as well as further reactions from various countries. Investors need to remain highly vigilant and cautiously respond to market fluctuations.