Aussie sharemarket wipes billions on latest Trump tariff announcement

The Aussie sharemarket fell heavily on Monday as traders reacted to the latest round of tariffs and the impact they could have on the domestic market.

Billions was wiped off the Australian share market on Monday, as the latest phase of the US President’s tariff plans had a direct impact on the domestic market.

Australia’s market fell after Donald Trump told media while flying to the Super Bowl that he would slap 25 per cent tariffs on steel and aluminium coming into the United States.

On the opening bell, around $15bn was wiped off the ASX as it tumbled 0.5 per cent, although the markets recovered somewhat throughout the day’s trading.

The benchmark ASX200 index finished the day down by 28.60 points or 0.34 per cent to close at 8482.80 points.

The broader All Ordinaries fell by 32.70 points or 0.37 per cent, to close at 8747.60 points.

President Donald Trump announced tariffs on steel and aluminium coming into the US. (Photo by Jim Watson / POOL / AFP)

The Aussie dollar is trading around US62.70c, after immediately falling on the news of Mr Trump’s plans. Much like the broader market, it recovered throughout the day’s trading.

Eight of the 11 sectors were lower on Monday with only utilities, health care and consumer staples trading in the green.

Betashares chief economist David Bassanese said the immediate reaction by the Australian market could have been over the top.

“A tariff on our steel exports to the US is a very small part of our economy, so the direct impact on our economy is pretty small,” Mr Bassanese said.

“At face value it is probably an over-reaction by the market, but it could be a sign of things to come.”

Mr Bassanese did however say if there were flow on impacts to the Chinese economy, it could be more meaningful for the local markets.

Both the steel and aluminium tariffs and the reciprocal tariffs will be effective immediately after formal announcements over the next few days, Mr Trump told reporters on Sunday local time.

“Basically for the US, the economy does not in any way need support through tariff protections,” Mr Bassanese said.

“It only makes sense if the economy had spare capacity and manufacturing was in the doldrums and the US economy is far from that.

“Everyone who wants a job can more or less get one so the US doesn’t need to hide behind tariff protections.

Mr Bassanese said there could be some positives to the tariffs.

“If Mr Trump uses tariffs as a means to push countries to engage in fair trade, it is probably on balance a good thing,” he said.

“But this across the board tariffs, it hurts countries irrespective of whether they engage in free trade or not, as it hurts us and China to the same degree.”

Prime Minister Anthony Albanese has a call scheduled with Mr Trump, where he will discuss the tariff issue.

There were pockets of strength on the market with three of the 11 sectors rising. Picture: NewsWire / Max Mason-Hubers

Despite the tariff news, shares in steelmaker BlueScope rose 1.81 per cent to $21.90 on Monday, compared to the market losses, after the company confirmed much of its steel production is done in the US.

“BlueScope is now the fifth largest steel producer in the US, employing 4000 American workers,” it said.

“BlueScope abides by all trade rules and agreements.”

JB Hi-Fi shares reversed its gains of 4.4 per cent at the start of trading day, finishing down 4.56 per cent or 497.78, despite announcing a 10 per cent bump in first half revenue to $5.67 billion.

Car Group dragged the communication services sector lower after a disappointing set of results.

Tech company WiseTech Global’s share price has slumped after fresh allegations were announced against billionaire founder Richard White. Shares fell 4.39 per cent to $124.20.

On an overall weak day on the ASX Star Entertainment Group’s shares soared 13.63 per cent to $0.125 after knocking back several offers to purchase its stake in its Brisbane Queen’s Wharf complex. This is despite mounting financial pressures on the business.

It was also a strong day for Ansell, up 8.13 per cent to $37.70 after reporting sales were up 12.5 per cent.

Originally published as Aussie sharemarket wipes billions on latest Trump tariff announcement