The Australian stock market experienced a significant loss of nearly $60 billion in early trading on Friday as investors responded negatively to the controversial policy shifts by Donald Trump and the deteriorating relationship between the US and its trading partners. The benchmark S&P/ASX 200 registered a decline of more than 2.4% at one point, before a minor recovery. This high volatility was triggered by the fluctuating changes in the US tariff regime, which had led to rapid changes in sentiment among investors.

The euance of the impact of these policy shifts differed across countries, with Australia continuing to face a 10% tariff as part of the US baseline charge. Additionally, the recent escalation in tariffs imposed on China since Trump’s tenure rose to 145%. The uncertainty surrounding the ongoing trade tensions affecting the markets further fueled the volatility.

Market analysts, such as Mantas Vanagas from Westpac, noted that the optimism previously generated by a temporary pause on higher US tariffs has vanished, replaced by concerns over the substantial effect that the continuing tariff policy and trade tensions will have on the US economy.

Reserve Bank of Australia governor, Michele Bullock, recently emphasized that the path ahead is fraught with uncertainty and that further economic volatility is to be expected as these trade disputes unfold. Despite this tumultuous period, there is no indication that the RBA is expediting any plans for interest rate cuts.

Nevertheless, the Australian dollar has seen a rebound in recent days, stabilizing above US62c on Friday, following its earlier risk of falling below the 59c mark.

Source: https://www.theguardian.com/business/2025/apr/11/australian-stock-market-slumps-amid-fears-of-worsening-us-china-trade-war