The Australian share market has lost $50billion as Donald Trump‘s broad-based tariffs stir fears of an American recession and higher consumer costs.
The benchmark S&P/ASX200 plunged 1.99 per cent in the opening half-hour of trade on Thursday morning.
By noon Sydney time, the loss rate had moderated to 1.59 per cent, with the index trading at 7,808.20 points.
At the worst point in early trade, $50billion had been wiped off Australian shares.
The falls on the Australian share market reflected what happened on Wall Street with the flagship S&P 500 diving by two per cent, as the tech-focused the Nasdaq dropped three per cent.
The Australian Agricultural Company, Australia’s largest integrated beef producer, did even worse with its share price plummeting by 3.18 per cent to $1.37 in early trade.
Livestock agent Elders saw its share price plunge 3.1 per cent to $6.55.
Beef was Australia’s biggest export to the United States last year and Trump has slammed Australia’s biosecurity laws as an affront to American graziers.
The benchmark S&P/ASX200 plunged 1.99 per cent in the opening half-hour of trade on Thursday morning
‘Australia bans — and they’re wonderful people, and wonderful everything — but they ban American beef,’ he said.
‘Yet we imported $US3 billion dollars of Australian beef from them just last year alone. They won’t take any of our beef.’
AMP chief economist Shane Oliver said fears of an American recession were spooking financial markets, considering the Trump Administration’s latest tariffs are now even more severe than the 1930 Smoot-Hawley tariffs during the Great Depression.
‘Our rough calculation is that the second of April announcement will take the US average tariff rate to above levels seen in the 1930s after the Smoot-Hawley tariffs which will in turn add to the risk of a US recession – via a further blow to confidence and supply chain disruptions – and a bigger hit to global growth,’ he said.
‘The risk of a US recession is probably now around 40 per cent.’
Australian Industry Group chief executive Innes Willox said an American-led trade war was likely to push up consumer prices, as protectionism drove up wholesale supply chain costs.
‘This will undoubtedly spark retaliation, imposing barriers on well-known trading relationships and driving up costs for businesses and consumers,’ he said.
The Australian share market has lost $50billion as Donald Trump ‘s broad-based tariffs stir fears of an American recession
