US auto industry warns new auto parts tariffs will hike prices, cut sales

A coalition of U.S. auto industry groups urged President Donald Trump not to impose 25% tariffs on imported auto parts warning they would cut vehicle sales and raise prices.

Trump said earlier he plans to impose tariffs of 25% on auto parts no later than May 3.

“Tariffs on auto parts will scramble the global automotive supply chain and set off a domino effect that will lead to higher auto prices for consumers, lower sales at dealerships and will make servicing and repairing vehicles both more expensive and less predictable,” said the letter signed by the Alliance for Automotive Innovation, the trade group representing nearly all major automakers, as well as the American Automotive Policy Council, representing the Detroit Three automakers, and other auto groups.

JP Morgan See Gold Prices Crossing $4,000/oz by Q2 2026

JP Morgan sees gold prices crossing the $4,000 per ounce milestone next year, following increased recession probabilities amid boosted U.S. tariffs and an ongoing U.S.-China trade war, the bank said in a note on Tuesday.

The bank now expects gold prices to reach an average of $3,675/oz by 4Q25, on the way towards above $4,000/oz by 2Q26, with risks skewed towards an earlier overshoot of these forecasts if demand surpasses its expectations.

Spot gold, which has gained 29% and hit 28 record highs this year, touched the $3,500 per ounce milestone for the first time on Tuesday. Earlier this month, Goldman Sachs raised its end-2025 gold price forecast to $3,700/oz from $3,300, noting that in “extreme tail scenarios,” gold could plausibly trade near $4,500/oz by end-2025.

In terms of a potential bearish case for gold, an unexpected drop off in central bank demand remains the biggest fundamental risk, the bank said.

“More materially bearish would be a scenario where U.S. economic growth remains extremely resilient to tariffs allowing the Fed to turn much more proactive in fighting inflation risks, prompting markets to price in hikes even before worrying inflation actually arrives,” analysts noted.

JP Morgan also predicts greater headwinds for silver in the near-term given industrial demand uncertainty, while a “catch-up window” will open over the second half of 2025 with prices set to rise towards $39/oz by 2025-end.

“Underpinning our forecast for gold prices heading towards $4,000/oz next year is continued strong investor and central bank gold demand averaging around 710 tonnes a quarter on net this year,” the bank noted.

The S&P 500 closed down 2.36%, after steadying along with the other indexes from losses steeper than 3%, in markets thinned by the absence of numerous overseas markets that remained closed for Easter. The Nasdaq Composite fell 2.55% and the Dow Jones Industrial index fell 2.48%. The U.S. dollar index was down 0.41% and selling of the 10-year Treasury note pushed its yield up 8.2 basis points to 4.4087%.

“The market is saying that it doesn’t necessarily need lower interest rates, but that it does need stability and certainty regarding economic and political policies. What we have now, with on again/off again tariffs, is extremely counterproductive. The market also is coming to the realization that negotiating with 90 countries in 90 days is just rhetoric; typically it takes 18 months or more to hammer out this kind of multidimensional trade deal. For now, the market is waiting beside the phone to see if there’s any progress made on trade deals and tariffs; if there is, it could snap back. If not, if the signals are that talks aren’t bearing fruit, well, that’s not going to be good.”

“As long as we’re in the midst of this 90-day pause on tariffs, and there continues to be this uncertainty, this kind of selloff is just what we have to expect. Tariffs is ultimately what will affect earnings, and the market, although to what extent no one knows. And now there is this new element added to it, the president’s criticism about Jerome Powell not cutting rates. It’s not so much about that criticism as the assault on another institution that is unnerving investors.”

“President Trump’s threat to fire Fed Chair Powell adds a new vector of uncertainty to the mix. It’s certainly unhelpful, since it’s hard to calculate a credit spread or earnings multiple to a stream of income when there are tariff threats, threats to remove a Fed chair and as a result, threats to economic growth. Companies, consumers and investors can all adapt to uncertainty, but not when the rules of the playing field are dynamically changing at such a fast pace. We don’t need to return to the world that existed prior to January 2025, just have some stability with policies. Right now, the market is feeling its way through the dark and doesn’t know quite how to behave or react to any news.”

NATE GARRISON, CHIEF INVESTMENT OFFICER, WORLD INVESTMENT ADVISORS, WASHINGTON, IOWA