SYDNEY (Reuters) - Asian shares skidded with Wall Street on Thursday while the dollar climbed to a three-week high after U.S. President Donald Trump announced new tariffs on all auto imports, ratcheting up a global trade war that risks fuelling inflation.

Japan's Nikkei fell 1.2% while South Korea's KOSPI dropped 0.9%. Japanese and South Korean automakers have a big presence in the U.S. market.

Toyota Motor shares tumbled 4%, Mazda Motor fell 5% and Subaru 6%.

Trump late on Wednesday announced plans for long-promised 25% tariffs on automotive imports, which are set to go into effect on April 2. The European Union expressed regret and Canada said it could impose retaliatory tariffs.

Nasdaq futures dropped 0.3% and S&P 500 futures fell 0.2% early in Asia. Wall Street already ended sharply lower on expectations of such a move, with the tech-heavy Nasdaq slumping more than 2% overnight.

After the announcement, U.S. automakers lost ground after the bell. General Motors slumped 8% while shares in Ford and U.S.-traded shares of Chrysler-parent Stellantis fell about 4.5% each.

"My initial reaction was this tariff might have some legs," said Chuck Carlson, CEO at Horizon Investment services.

"I could see the U.S. automakers getting some exemptions based on their supply chains. But I think he (Trump) may want to see how this works out as opposed to stopping it in two or three days."

Trump, however, said the reciprocal tariffs on all countries will be "lenient". On China, he said he may give Beijing some reduction in tariffs to get the TikTok deal done.

Analysts have warned Trump's tariff plans could stoke U.S. inflation, with the Federal Reserve already pausing its policy easing cycle.

St Louis Fed President Alberto Musalem said on Wednesday the Fed had no urgency to cut rates, and cautioned that tariffs could trigger more persistent price pressures. Minneapolis Fed President Neel Kashkari said the Fed should stay put amid continued policy uncertainty.

In currency markets, the Mexican peso and the Canadian dollar led the losses, with a 0.8% drop and a 0.2% decline respectively.

The dollar index, which measures the greenback against six major peers, rose 0.5% overnight to 104.71, the highest in three weeks, before settling at 104.58 on Thursday.

The rise has been aided by higher Treasury yields. The benchmark Treasury yields held steady at 4.354%, having gained 5 basis points overnight.

Gold was 0.1% higher at $3,022 per ounce, not far from a record high of $3,057.