The Australian sharemarket fell to its lowest level this year on Wednesday as US President Donald Trump kicked off a tumultuous global trade war.

The S&P/ASX 200 Index fell 0.7 per cent, or 57 points, to 8141.10 points, after dropping more than 1 per cent earlier in the session. The All Ordinaries fell 0.7 per cent. Nine of 11 sectors were in the red, with losses led by consumer staples.

The sharemarket’s drop followed a volatile session on Wall Street after tariffs on Canada, Mexico and China came into effect, which prompted the targeted countries to retaliate with levies of their own.

Hopes for any reprieve were dashed after Trump reiterated plans to Congress on Wednesday that he would impose sweeping reciprocal tariffs on April 2 and said the US “had been ripped off for decades” by major trade partners. The Australian dollar slipped towards US62¢ following the announcement, before paring losses.

In China, stocks rallied after the government unveiled a slew of new economic stimulus and said it would push its deficit to the highest level in more than three decades to spur growth.

That failed to impress Australian traders as the ASX held its losses. Energy stocks weighed on the index after oil traded near $US70 a barrel, hitting its lowest level this year. Banks also retreated with Commonwealth Bank dipping 0.9 per cent to $156.39. Supermarket giant Coles and Treasury Wine Estates weighed on consumer staples after trading ex-dividend, dropping 4.4 per cent to $18.89 and 5.6 per cent to $9.97 respectively. Woolworths shares also fell 3.9 per cent to $28.72.

Elsewhere, bullion steadied near a record high, driving gold miners upwards, as Trump’s tough stance on tariffs sparked haven buying. West African Resources was the bourse’s best-performing stock, gaining 6.5 per cent to $1.89.

BlackRock head of APAC investment strategy Thomas Taw said investors were fleeing growth equities amid the volatility and favouring more defensive sectors and alternatives such as gold. “The good parts from a Trump presidency – planned tax cuts, fiscal spending – have been priced in. But the stuff that’s bad for markets – like the inflationary impact of tariffs – might not be.”

Stocks on the move

In corporate news, WiseTech said it expected to appoint a new director within one month as its audit and risk committee is now short of a key ASX requirement. The shares rose 1.2 per cent to $91.06, reversing an earlier fall.

Mineral Resources dropped 1.9 per cent to $21.08 after Fitch Ratings downgraded the loss-making miner’s unsecured debt and flagged higher risks to its balance sheet. MinRes downplayed those concerns, noting that Moody’s has held a similar rating of “Ba3” on it since 2019.

KMD Brands gained 1.5 per cent to 35¢ after the retailer appointed Brent Scrimshaw, a former Nike executive, as chief executive.

And Insurance Australia Group advanced 1.4 per cent to $7.83 after it said its reinsurance arrangements would kick in to protect shareholders from losses when Tropical Cyclone Alfred hits Australia’s east coast this week.