The Australian sharemarket dropped on Wednesday as US President Donald Trump ramped up his protectionist trade war, doubling down on threats to slap higher tariffs on copper imports as well as pharmaceuticals.

The S&P/ASX 200 Index slipped 52.1 points, or 0.6 per cent – its biggest one-day fall in nine weeks – to close on Wednesday at 8538.6, its lowest level since June 27.

Seven of the 11 sectors finished in the red, paced by a sell-off in copper producers, despite sales to the US making up only a tiny fraction of Australia’s total copper exports.

Copper futures dropped as much as 2.4 per cent overnight after the US president said he would impose a 50 per cent tariff on copper within weeks.

Prices fell as low as $US9553.50 a tonne on the London Metal Exchange at the start of trade on Wednesday, but pared losses to trade down 0.4 per cent at $US9751.50 a tonne in early Asian trading.

Miners hit

The price moves hit the mining sector. Sandfire Resources dropped 3.5 per cent to $11.18 and Capstone Copper fell 3 per cent to $9.28. Evolution, which produces both copper and gold, sank 7 per cent to $7.29.

“The copper stocks getting beaten up doesn’t make much sense – these guys don’t sell anything really to the US, it goes to China,” Hugh Dive, chief investment officer at Atlas Funds Management, told The Australian Financial Review.

“Trump could put a 1 million per cent tariff on copper, but if we don’t trade there, it doesn’t matter, it’s not going to impact earnings. It’s all theatre.”

Even so, BHP fell 1 per cent to $37.85, and Rio Tinto came off 0.6 per cent to $107.59. The ASX’s more diversified mining giants are expected to face a smaller hit on their exports from the Escondida mine they jointly own in Chile, which is the world’s largest producer of copper concentrates and cathodes.

Trump also flagged that he could offer pharmaceutical manufacturers at least a year before applying a 200 per cent tariff on their foreign-made products, which prompted Federal Treasurer Jim Chalmers to “urgently” seek more details from the US president.

The reaction on the ASX was more muted, – biotech giant CSL fell 0.9 per cent to $243.71.

Elsewhere, gold miners sank as bullion traded near $US3300 an ounce, after a 1 per cent loss in the previous session. Newmont tumbled 5.4 per cent to $87.46 and Northern Star 3.4 per cent to $16.37.

Property stocks fell for the second day after the Reserve Bank shocked the market on Tuesday by keeping the cash rate at 3.85 per cent. Goodman Group was down 2.6 per cent at $34.03 and Stockland 1.5 per cent at $5.44.

Stocks on the move

In corporate news, Lifestyle Communities plunged 37.2 per cent to $4.42 after a landmark tribunal decision that found its lucrative deferred management fees, or exit fees, charged to residents were invalid under state tenancy laws.

Orica rose 2.9 per cent to $20.40 on news it had appointed outgoing Boral chief executive Vik Bansal as its next chairman.

Telix Pharmaceuticals leapt 5.6 per cent to $25.39 after announcing its prostate cancer imaging agent was granted a permanent insurance code by the US Medicare and Medicaid system.

Bega Cheese slipped 1.5 per cent to $5.21 after saying it would close its loss-making peanut processing company.

And A2 Milk dropped 4.1 per cent to $7.30 after Citi cut its outlook to “neutral”, with a short-term share price target of $8.20.

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