Asian stocks experienced a decline on Friday, particularly in South Korea and Japan, as safe-haven gold reached a record high. The escalation of trade tensions sparked concerns among investors, following U.S. President Donald Trump's announcement of a 25% tariff on auto imports set for implementation next week. This move drew criticism from global politicians and industry leaders, with warnings of potential price increases from car manufacturers.

The global trade war initiated by Trump has significantly impacted markets, particularly affecting shares of global automakers. In Asia, Japan's Nikkei dropped over 2%, predominantly driven by decreases in Toyota and Honda stocks. South Korea's main index also reached a two-week low, declining by 1.3%. Although markets in Hong Kong were relatively unaffected by the auto tariff threat, Trump mentioned a willingness to lower tariffs on China in exchange for a deal with TikTok's parent company.

There were speculations among economists regarding the potential impacts of the U.S. tariffs on auto imports, suggesting that producers could adjust supply chains to lessen the effects. Some automakers have already announced plans to relocate certain production activities in response. The focus now shifts to the reciprocal tariffs the U.S. is expected to reveal on April 2, with uncertainties surrounding the nature of these measures.

The currency market saw the dollar heading for a quarterly decline, influenced by concerns over the impact of tariffs on U.S. growth. The euro remained stable, while the yen strengthened slightly in early trading, projecting a substantial gain against the dollar in the past quarter. Traders anticipated a potential Bank of Japan interest rate hike amidst the evolving trade landscape.