Global markets waver as Trump's auto tariffs stir economic uncertainty

[MALAYSIA] Investors have paused their bargain-hunting efforts on Bursa Malaysia following the news of increased tariffs on auto imports to the United States.

Wall Street equities fell overnight following US President Donald Trump's additional 25% import tariff on vehicles and car parts entering the US, which is expected to exacerbate the global trade battle and damage car prices in the world's largest economy.

The additional tariffs, announced by President Trump on Wednesday, will go into force on April 2, with collection beginning on April 3. This move has sent shockwaves across the global car sector, with analysts forecasting higher pricing and possible production slowdowns. The tariffs are part of Trump's broader economic strategy, which he claims will generate revenue to offset proposed tax cuts and revitalize the declining US industrial sector.

Malaysia's local market remained reasonably resilient, with the benchmark index down 4.97 points at 1,513.08. According to Rakuten Trade, unless a breakout occurs, the index may remain range-bound until new catalysts materialize. "We expect the FBM KLCI to trend within the range of 1,510-1,530 for today," the bank stated in a note.

The impact of Trump's tariffs goes beyond the car industry, hurting consumer confidence in the United States and even influencing global markets. The Conference Board announced that US consumer confidence fell to its lowest level in almost four years in March, dropping 7.2 points to 92.9. This is the fourth straight monthly dip, indicating that American consumers are increasingly concerned about the economy, job market, and personal financial conditions.

According to TA Securities, bargain-hunting interest is likely to continue gains in local blue chips, but US consumer confidence has dropped to its lowest level in more than four years, raising concerns about the health of the world's largest economy.

Immediate index resistance remains around 1,550, followed by 1,580, with a stronger upside obstacle at 1,605. Immediate support is set around 1,500, with stronger critical retracement levels at 1,472 and 1,450, according to the research firm's market analysis.

The uncertainty surrounding global trade policies has influenced the outlook for inflation and economic growth. The Federal Reserve recently reduced its GDP growth forecast for 2025 down to 1.7% from 2.1% in December, while core inflation is expected to hit 2.8% by year-end. These estimates, together with the possible impact of tariffs on consumer prices, have generated fears about stagflation, which is characterized by weak economic growth and rising inflation.

PETRONAS Dagangan declined 32 sen to RM18.58, YTL Power fell six sen to RM3.34, and Telekom Malaysia fell four sen to RM6.56.

Nestle rose 58 sen to RM72.98, IHH gained nine sen to RM6.90, and Gamuda climbed 15 sen to RM4.16.

As global markets cope with the consequences of Trump's trade policy, investors are intently tracking developments in key economies. The European Union has already responded to Trump's metal tariffs, prompting the US president to threaten a 200% charge on European alcoholic beverages. This escalation in trade tensions has added to general market uncertainty, potentially influencing investment decisions and capital flows across sectors and geographies.

NexG was steady at 25.5 sen, MBSB fell 1.5 sen to 70.5 sen, and Ingenieur remained unchanged at three sen.