Global Markets React to New U.S. Tariffs as ASX Suffers Significant Losses
The Australian sharemarket sees a notable decline following tariff announcements by President Trump, impacting various sectors and global futures.
The Australian Securities Exchange (ASX) experienced a substantial dip on April 3, 2025, erasing approximately $26.2 billion in market value by lunchtime, primarily attributed to newly announced tariffs by U.S. President Donald Trump.
The S&P/ASX 200 index fell by 1.1 percent, or 85.3 points, reaching 7849.2 around 2 PM AEDT, with ten sectors reporting losses while the consumer staples sector was one of the few to see a positive performance.
The technology and property sectors were notably affected, both declining by over 2 percent.
President Trump announced a 10 percent baseline tariff applicable to all countries, alongside more targeted tariffs: 34 percent on imports from China, 20 percent on the European Union, and 24 percent on Japan.
These measures marked an escalation in the ongoing trade tensions, as they compounded existing tariffs already imposed earlier this year, particularly the 20 percent tariff on Chinese goods.
President Trump specifically cited the U.S. beef industry in his remarks, while Canada and Mexico were notably excluded from these new tariffs, resulting in strengthened positions for the peso and Canadian dollar against the U.S. dollar.
In response to the announcements, there are mounting concerns regarding the potential for a global economic slowdown, which has led traders to increase their expectations for a rate cut from the Reserve Bank of Australia in the upcoming meeting.
Asian equity markets also demonstrated significant reactions to the tariffs, with Japan's Nikkei 225 index dropping by 3 percent.
S&P 500 futures are reported to have decreased by around 2.5 percent while Nasdaq futures fell by more than 3 percent.
Major technology stocks in the U.S. faced severe losses in after-hours trading, with Tesla plummeting over 8 percent, Apple down by 7.1 percent, and Amazon declining more than 6 percent.
The adverse effects on markets extended to the ASX, particularly within the technology sector, which witnessed a 2.5 percent drop overall as prominent players such as WISETECH contributed to these losses.
The banking sector had mixed results; Commonwealth Bank saw a slight increase of 0.2 percent, while other major banks like Macquarie and ANZ reported declines of 2.4 percent and 1.4 percent, respectively.
ANZ's drop was influenced by regulatory requirements from APRA for the bank to increase its risk management reserves by an additional $250 million.
Concerns regarding the impacts of tariffs on economic growth in China, a key market for Australian iron ore exports, led to declines in the mining sector as well.
BHP and Rio Tinto both saw their share prices decrease by 2.2 percent.
Ansell, a medical equipment manufacturer with significant exports to the U.S., recorded the largest loss on the index, falling by 13.9 percent as it shifts manufacturing away from China in response to the evolving trade landscape.
Among other notable stock movements, Galan Lithium experienced a surge of 38.1 percent after rebuffing a $150 million takeover offer, while Cettire, an online luxury fashion retailer, dropped 12 percent due to expected price increases in the U.S. market following the implementation of tariffs on European-made goods.
Treasury Wine Estates reported a 2 percent decrease despite affirming to investors that the new tariffs would have a minimal impact on its financial performance, citing that only 15 percent of wines from its American business are sourced from outside the U.S.
The S&P/ASX 200 index fell by 1.1 percent, or 85.3 points, reaching 7849.2 around 2 PM AEDT, with ten sectors reporting losses while the consumer staples sector was one of the few to see a positive performance.
The technology and property sectors were notably affected, both declining by over 2 percent.
President Trump announced a 10 percent baseline tariff applicable to all countries, alongside more targeted tariffs: 34 percent on imports from China, 20 percent on the European Union, and 24 percent on Japan.
These measures marked an escalation in the ongoing trade tensions, as they compounded existing tariffs already imposed earlier this year, particularly the 20 percent tariff on Chinese goods.
President Trump specifically cited the U.S. beef industry in his remarks, while Canada and Mexico were notably excluded from these new tariffs, resulting in strengthened positions for the peso and Canadian dollar against the U.S. dollar.
In response to the announcements, there are mounting concerns regarding the potential for a global economic slowdown, which has led traders to increase their expectations for a rate cut from the Reserve Bank of Australia in the upcoming meeting.
Asian equity markets also demonstrated significant reactions to the tariffs, with Japan's Nikkei 225 index dropping by 3 percent.
S&P 500 futures are reported to have decreased by around 2.5 percent while Nasdaq futures fell by more than 3 percent.
Major technology stocks in the U.S. faced severe losses in after-hours trading, with Tesla plummeting over 8 percent, Apple down by 7.1 percent, and Amazon declining more than 6 percent.
The adverse effects on markets extended to the ASX, particularly within the technology sector, which witnessed a 2.5 percent drop overall as prominent players such as WISETECH contributed to these losses.
The banking sector had mixed results; Commonwealth Bank saw a slight increase of 0.2 percent, while other major banks like Macquarie and ANZ reported declines of 2.4 percent and 1.4 percent, respectively.
ANZ's drop was influenced by regulatory requirements from APRA for the bank to increase its risk management reserves by an additional $250 million.
Concerns regarding the impacts of tariffs on economic growth in China, a key market for Australian iron ore exports, led to declines in the mining sector as well.
BHP and Rio Tinto both saw their share prices decrease by 2.2 percent.
Ansell, a medical equipment manufacturer with significant exports to the U.S., recorded the largest loss on the index, falling by 13.9 percent as it shifts manufacturing away from China in response to the evolving trade landscape.
Among other notable stock movements, Galan Lithium experienced a surge of 38.1 percent after rebuffing a $150 million takeover offer, while Cettire, an online luxury fashion retailer, dropped 12 percent due to expected price increases in the U.S. market following the implementation of tariffs on European-made goods.
Treasury Wine Estates reported a 2 percent decrease despite affirming to investors that the new tariffs would have a minimal impact on its financial performance, citing that only 15 percent of wines from its American business are sourced from outside the U.S.
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