The Australian Financial Review reports that concerns about a potential recession in the US could result in a staggering loss of over $114 billion today. Last Friday, Australian shares plummeted, closing down $56.6 billion—the most significant drop in eight months—following tariff announcements made by the Trump administration.
The S&P/ASX 200 Index experienced a 2.4 per cent decline, equating to a loss of 191.9 points, finishing at 7667.8 points. Although Australia’s exports to the US, which are now subject to a new broad 10 per cent tariff, account for only approximately four per cent of the country’s total exports, fears surrounding an escalating trade conflict between the US and China—Australia’s largest trading partner—have severely impacted the stock market.
In response to the US imposing a 34 per cent tariff on certain imports, China has retaliated with its own 34 per cent tariff on US goods, compounding the tension. Compounding this issue, additional countries, including allies like India, South Korea, and those within the European Union, are poised to enact their own retaliatory measures.
Meanwhile, Australian Prime Minister Anthony Albanese has committed to keeping US tariffs off the agenda while refraining from making concessions to US lobbyists who are pressing for the lowering of trade barriers. This is particularly in regard to Australia’s stringent biosecurity laws that restrict the importation of US beef, and the more affordable medications facilitated by the Pharmaceutical Benefits Scheme.
According to the Associated Press, the White House has indicated that over 50 countries have reached out to initiate discussions regarding the new tariffs, highlighting the international ramifications of the current trade disputes and their consequences on global markets. As these developments unfold, the Australian stock market must navigate the turbulent waters created by international trade tensions and policy changes.