Australian Prime Minister Anthony Albanese has ruled out implementing ‘reciprocal’ tariffs on US goods coming into Australia following US President Donald Trump’s worldwide tariff roll-out overnight (AEDT).
News of the far-reaching tariffs saw the Australian Securities Exchange (ASX) take a sharp hit, with the materials sector bearing the brunt of it.
Trump has set a baseline tariff of 10% on all imports to the US for all countries, but some countries will be subjected to much higher tariffs.
Chinese goods entering the US will attract a 34% tariff, while goods from Japan will be taxed 24% and products originating from the European Union will be slapped with a 20% tariff.
Australia was not exempt, with all goods exported to the US subject to a 10% tariff.
ANZ Head of Australian Economics Adam Boyton says the US is not a major destination for Australian exports, which means the direct trade impact of US tariffs is not likely to be significant for the broader economy – although they may be for specific sectors.
“Of more significance is likely to be the impact on global growth and market sentiment,” he says.
There are currently no taxes on US goods entering Australia, but Albanese says he will not impose reciprocal tariffs in response.
“For Australia, these tariffs are not unexpected, but let me be clear – they are totally unwarranted,” Albanese says. “President Trump referred to reciprocal tariffs. A reciprocal tariff would be zero, not 10%.”
Albanese says the decision will add to uncertainty in the global economy and it will push up costs for American households.
“It is the American people who will pay the biggest price for these unjustified tariffs. This is why our government will not be seeking to impose reciprocal tariffs,” he says.
“We will not join a race to the bottom that leads to higher prices and slower growth. We will stand up for Australia.”
The S&P/ASX 200 sank 2%, or 158.4 points, to 7,776.1 points as of 10.30am (AEDT), forcing the index to a 2.42% loss over the past five days.
All 11 sectors started the day in the red with materials leading the way down on a 1.16% retreat. Utilities fell 0.46%, industrials gave back 0.23% and energy edged down 0.1%.
Again the gold miners were the outliers as the price of the safehaven metal edged higher. Ramelius Resources (ASX:RMS) advanced 3.04% to $2.37, Newmont (ASX:NEM) rallied 2.42% to $78.16, De Grey Mining (ASX:DEG) jumped 2.4% to $2.13 and Spartan Resources (ASX:SPR) lifted 1.91% to $1.87.
Ramelius reported record underlying free cash flow of $223 million for the March quarter following quarterly production of 80,455 ounces. The producer also declared a maiden interim fully franked dividend of $0.03 per share to be paid on 17 April.
Meanwhile, State Street recently took a 5% stake in Spartan, which is in the process of being acquired by Ramelius.
The asset manager yesterday (2 April) raised its 2025 bull case gold price outlook range to US$3,100-US$3,400, up from US$2,900 to US$3,100 previously, as a result of the strong tailwinds in the first quarter of the year and robust exchange-traded fund inflows.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & iStock
