Donald Trump has sent stock markets tumbling with his Liberation Day tariffs. Image: Social media.
Australian shares dropped to a near eight-month low on Friday (4 March) and the US stock market recorded its largest falls since the shock of COVID-19 in 2020.
Wall Street lost more than $US3 trillion ($A4.75 trillion) almost immediately following US President Donald Trump’s so-called Liberation Day declaration of sweeping tariffs on all goods imported to America.
Overnight, the Dow Jones Industrial Average fell 1,679.39 points, or 3.98 per cent, at 40,545.93 points.
The S&P 500 lost 274.45 points, or 4.84 per cent, and Nasdaq fell 1,050.44 points, or 5.97 per cent.
The US President announced a 10 per cent baseline tariff on Thursday (Australian time), but with some imports from various countries being whacked with even higher imposts – up to 49 per cent.
Australia fared better than most countries, so far attracting only a 10 per cent tariff, but with a special Trump mention of Australian beef.
Fiji is the hardest hit among Pacific island nations, with a 32 per cent tariff; followed by Vanuatu with a 22 per cent tariff; and Nauru with a 30 per cent tariff.
Mr Trump has described the stock market reaction in the US as America “healing” and said “the markets are going to boom”.
But some economists are predicting a US recession, which will have far-reaching impacts for the global economy.
Asian markets posted further losses after opening on Friday, with tech stocks being hit hard.
Tokyo’s Nikkei index was down 1.8 per cent, adding to a drop on Thursday of 2.77 per cent.
The Topix index fell 2.3 per cent, having lost 3.08 per cent on Thursday.
In Australia, commodities were in a sell-off, and the S&P/ASX 200 index fell by 1.3 per cent to 7,756 before midday Friday.
Technology firms dipped five per cent to a one-year low; and financial firms were trading 1.6 per cent lower.
Energy firms lost 6.8 per cent to record their lowest level since November 2020, with prices suffering their biggest fall in three years.
Woodside Energy fell seven per cent; Santos fell 7.2 per cent; Fortescue was down 1.6 per cent; and Rio Tinto fell 2.3 per cent.
The major supermarkets rose, however, with Coles up 2.1 and Woolworths up 0.9 per cent.
While Mr Trump said the tariffs were reciprocal measures made necessary because of trade barriers in place around the world, Australian Prime Minister Anthony Albanese is dangling the prospect of using dispute resolution powers in Australia’s free trade agreement with the US.
“The Australian people have every right to view this action by the Trump Administration as undermining our free and fair trading relationship,” the Prime Minister said.
“Our existing free trade agreement with the United States contains dispute resolution mechanisms.
“We want to resolve this issue without resorting to using these.”
Mr Albanese is channeling $50 million in emergency support funding to Australian industries affected by the newly-imposed tariffs, and offering $1 billion in zero-interest loans to help develop new export opportunities beyond the US.
“Our government will always stand up for Australian jobs, Australian industry, Australian consumers and Australian values,” he said.
Opposition leader Peter Dutton described the Australia-US relationship as a “special relationship” but added that Mr Trump had not respected that by imposing the tariffs.
“I think this is a bad day for our country and it’s not the treatment that Australians deserve,” he said.
But Mr Dutton also suggested there would have been a different outcome if he was prime minister, as he would have been able to use his US contacts from the time he was in the former Coalition government to shore up more favourable treatment for Australia.
Original Article published by Chris Johnson on Region Canberra.
