...Trump's tariff is a game changer to the downside. ASX to tumble 1pc after China tariff blow
Nicola Blackburn
News that the US will impose a 10 per cent tariff on imports from China is set to deliver a blow to Australian shares on Monday – just as earnings season kicks off.
ASX futures fell 1.2 per cent, or 101 points, on Monday morning, indicating shares could hit a two-week low. The Australian dollar tumbled below US62¢ to a one-month low.
Investors’ fears about the new administration in the US were confirmed on Sunday after Trump signed orders imposing tariffs of 25 per cent on goods from Canada and Mexico and 10 per cent on China. That announcement dragged US equity indexes lower on Saturday, led by a 0.8 per cent drop for the Dow Jones Industrial Average. The S&P 500 fell 0.5 per cent and the Nasdaq 0.3 per cent.
Futures trading indicates the Dow will fall a further 0.8 per cent when the US market opens on Monday night. Bitcoin tumbled 3.7 per cent to trade at $US97,616, as investors fled risk assets.
“The overall impact of the weekend’s announcement, particularly if a quick resolution can’t be found, is a contraction in global trade and higher inflation, which is a headwind for equities and a positive for the US dollar and gold,” said IG analyst Tony Sycamore.
