Trump’s Tariff Pledge Sends ASX into Retreat as Market Braces for Trade Tensions

SYDNEY—Australia’s stock market slumped on Monday after former United States President Donald Trump reignited global trade concerns by pledging to reintroduce sweeping tariffs on Chinese imports if returned to office. The ASX 200 (Australian Securities Exchange 200) fell by over 1.2%, marking one of the sharpest single-day declines in recent weeks.

Speaking at a campaign rally in Michigan, Trump said he would target what he described as “unfair Chinese trade practices” by imposing new tariffs as high as 60% on selected imports. The remarks immediately reverberated across financial markets, with investors rushing to reassess risks tied to escalating protectionism.

Australian mining and energy stocks led the sell-off, with BHP Group, Rio Tinto, and Woodside Energy all posting substantial losses. As China remains Australia’s top trading partner, any disruption to that relationship poses significant risk to national economic performance.

“Markets don’t react well to trade war rhetoric, especially when it threatens to unsettle key sectors like mining and agriculture,” said Sarah Lindholm, lead analyst at Pacific Trade Advisers (PTA). “For Australia, whose exports are deeply linked to China, this is a red flag.”

The AUD (Australian Dollar) also weakened, slipping to 66.2 US cents against the USD (United States Dollar), as currency markets priced in the likelihood of declining export revenues.

Financial stocks also faced pressure as uncertainty around global trade impacted investor sentiment, while technology shares were pulled lower in line with broader global trends.

Compounding the economic concern, the Reserve Bank of Australia (RBA) has previously warned that deteriorating global conditions could stall recovery efforts. With inflation still above target and domestic growth slowing, new trade shocks may limit the RBA’s flexibility in managing interest rates.

Critics argue the current federal government remains unprepared for shifts in global trade policy and too dependent on singular markets. Calls are growing for a diversified export strategy to reduce exposure to geopolitical tensions and maintain economic stability.

With U.S. elections nearing and global trade relations under fresh strain, the coming months may prove volatile for markets reliant on international stability.