Trumps US auto tariffs hit stocks as gold rises

Global stock markets have fallen as shares in some of the world's biggest carmakers tumble after US President Donald Trump announced new tariffs on auto imports.

Trump announced 25 per cent tariffs on all vehicles and foreign-made auto parts imported into the United States late on Wednesday, prompting heavy losses in Japanese and South Korean stocks in Asian trading overnight.

Following the tariff announcement, US automakers lost ground after the bell.

General Motors slumped six per cent, while shares in Ford fell almost five per cent, reflecting concerns about the impact on their supply chains.

European stocks fell in early trading, with shares in Europe's top carmaker Volkswagen taking a hit, along with BMW and Mercedes-Benz.

The STOXX 600 hit a two-week low, down 0.5 per cent on the day at 0958 GMT.

The FTSE 100 was down 0.6 per cent and Germany's DAX was also down 0.6 per cent as investors braced for impact on Germany's automotive sector.

Euro zone bond yields dropped, with Germany's two-year yield hitting its lowest since March 5.

The tariffs are the latest escalation in a global trade war investors fear will hurt growth and could stoke US inflation.

On China, Trump said he might give Beijing some reduction in tariffs to get a deal done to sell TikTok, which helped Chinese shares outperform in Asian trading.

Japan's Prime Minister Shigeru Ishiba said all options were on the table in response to the US tariffs.

Canada said it could impose retaliatory duties, while the European Union expressed regret but was seeking negotiated solutions.

Trump has repeatedly touted plans to announce reciprocal tariffs on all countries on April 2, which he has dubbed "Liberation Day".

On Thursday, Trump said that these tariffs will be "lenient".

"Uncertainty on the tariff front remains high, which is really tough for both businesses but also investors to plan into the future, and of course it's making it really difficult for investors to price risk," said Baylee Wakefield, a multi-asset portfolio manager at Aviva Investors.

"We all know that markets hate uncertainty and we are facing it on all fronts at the moment.

"I think that markets are going to be trading on sentiment until we've had that announcement next week."

In currency markets, the dollar index was down about 0.2 per cent at 104.47.

The euro hit a three-week low of $US1.0731 ($A1.6992) overnight before recovering to trade about $US1.0769 in early European trading.

"Perhaps the FX market is dealing with tariff fatigue, and apart from already being priced in, the muted reaction may be a result of Trump suggesting that next week's reciprocal tariffs could be quite lenient," ING's global head of markets, Chris Turner, said in a note.

Gold prices rose, up 0.7 per cent on the day at $US3,040 ($A4,814) an ounce.

Goldman Sachs raised its gold price forecast on Wednesday, citing stronger-than-expected ETF inflows and sustained central bank demand.

The benchmark 10-year Treasury yield gained six basis points, to trade at 4.3964 per cent.

Oil prices fell as markets assessed the new tariffs.

Brent crude futures were down 0.4 per cent at $US73.51 ($A116.40) a barrel and US West Texas Intermediate crude futures fell 0.3 per cent to $US69.41 ($A109.91).

Concerns more tariffs could weaken the global economy, denting energy demand, tend to weigh on crude prices.