Australian share market suffers $50billion bloodbath after Trump tariff - but one export bucks the trend and SOARS in value
- Australian share market down 2 per cent in early trade
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The Australian share market has lost $50billion as Donald Trump's broad-based tariffs stir fears of an American recession and higher consumer costs.
The benchmark S&P/ASX200 plunged 1.99 per cent in the opening half-hour of trade on Thursday morning.
By noon Sydney time, the loss rate had moderated to 1.59 per cent, with the index trading at 7,808.20 points.
At the worst point in early trade, $50billion had been wiped off Australian shares.
The falls on the Australian share market reflected what happened on Wall Street with the flagship S&P 500 diving by two per cent, as the tech-focused the Nasdaq dropped three per cent.
The Australian Agricultural Company, Australia's largest integrated beef producer, did even worse than the broader local market with its share price plummeting by 3.18 per cent to $1.37 in early trade.
Livestock agent Elders saw its share price plunge 3.1 per cent to $6.55.
Beef was Australia's biggest export to the United States last year and Trump has slammed Australia's biosecurity laws as an affront to American graziers.
The benchmark S&P/ASX200 plunged 1.99 per cent in the opening half-hour of trade on Thursday morning
'Australia bans — and they're wonderful people, and wonderful everything — but they ban American beef,' he said.
'Yet we imported $US3billion dollars of Australian beef from them just last year alone. They won't take any of our beef.'
A 10 per cent tariff has been imposed on Australian exports to the US, despite both nations signing a free-trade deal two decades ago.
Moomoo market strategist Jessica Amir said Trump's 'Liberation Day' tariffs had scared investors in a range of sectors, from technology to agriculture.
'It's not only a bad scene for Australian equities, but also US investors, with stocks falling like a knife,' she said.
'Tariffs will hurt most global companies, Australian farmers, and investors alike.'
AMP chief economist and head of investment strategy Shane Oliver said fears of an American recession were spooking financial markets, considering the Trump Administration's latest tariffs are now even more severe than the 1930 Smoot-Hawley tariffs during the Great Depression.
'Our rough calculation is that the second of April announcement will take the US average tariff rate to above levels seen in the 1930s after the Smoot-Hawley tariffs which will in turn add to the risk of a US recession – via a further blow to confidence and supply chain disruptions – and a bigger hit to global growth,' he said.
The Australian share market has lost $50billion as Donald Trump 's broad-based tariffs stir fears of an American recession
'The risk of a US recession is probably now around 40 per cent.'
Australian Industry Group chief executive Innes Willox said an American-led trade war was likely to push up consumer prices, as protectionism drove up wholesale supply chain costs.
'This will undoubtedly spark retaliation, imposing barriers on well-known trading relationships and driving up costs for businesses and consumers,' he said.
Australia has been hit with a broad-based 10 per cent tariff, in line with New Zealand, the UK, United Arab Emirates, Saudi Arabia, Egypt.
South American beef producers Brazil, Argentina and Chile are also been hit with 10 per cent tariffs.
But China, Australia's biggest trade partner, is being hit with 34 per cent tariffs, as Japan cops 24 per cent import duties compared with 25 per cent for South Korea.
A slowdown in China could affect demand for Australia's biggest export iron ore, the commodity used to make steel.
But gold, Australia's second biggest export to the US last year, hit a new record high of $US3,173 per fine ounce on Thursday afternoon.
The commodity is regarded as safe-haven asset during times of financial market turmoil.
The fear of Trump tariffs saw Americans clamour for Australian gold in January, which caused Australia to have a rare monthly trade surplus with the United States.
