The Australian Securities Exchange (ASX) has experienced a significant downturn today, with $53 billion lost in early trading as the ramifications of US President Donald Trump’s tariffs reverberate through the market. At 2pm AEST, the White House announced an alarming increase in tariffs on imports from China, rising to a staggering 104 per cent. Consequently, the ASX 200 index fell by 2 per cent, opening at 7349 at 10am.
Mineral stocks have emerged as notable casualties in this latest market shake-up. While Australia might not immediately bear the brunt of the 10 per cent tariff imposed on its exports to the US, the reinforced tariffs on Asian imports could adversely affect the local economy. According to eToro market analyst Josh Gilbert, China’s rebuttal, committing to “fight to the end,” offers little optimism for market stability.
Gilbert poignantly highlighted the interconnectedness of the Australian and Chinese economies, stating, “If China sneezes, Australia is likely to catch a cold.” As China’s economic prospects remain uncertain, so do those of the Australian dollar, which is heavily reliant on trade with its largest partner. The prevailing sentiment is one of volatility and unpredictability; discussions regarding a potential recession are rampant, keeping risk assets under strain until there is a clearer path forward regarding tariffs, negotiations, and movements from central banks.
In summary, the ASX is grappling with heavy losses, driven by escalating tariffs announced by the US, which are poised to have wide-ranging implications not only for Australia but for global markets as well.