How are ASX 200 investors responding to the new Trump tariffs today?

Australia didn't escape the new Trump tariffs. Here's how ASX investors are repositioning today.

| More on:
A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

S&P/ASX 200 Index (ASX: XJO) investors appear decidedly less than pleased with the sweeping new Trump tariffs announced by the United States president overnight.

In morning trade on Thursday, the benchmark index is down 1.8%.

Donald Trump made his 'Liberation Day' tariff announcement after US stock markets had already closed in the green for the day.

But futures markets are portending a big down day in US stock markets tomorrow.

S&P 500 Index (SP: .INX) futures are down 3.6% at time of writing. And US tech stocks look like they could be in for an even worse drubbing, with Nasdaq Composite Index (NASDAQ: .IXIC) futures down a precipitous 4.5%.

Some 60 nations will be hit with the new Trump tariffs. Cambodia faces the highest impost of 49%, with China getting walloped with a 34% hit on its exports into the US.

Australian exporters are getting off relatively easy, facing the baseline 10% tariff. In 2024, Australia exported some $23 billion worth of items to the US.

Prime Minister Anthony Albanese said the Trump tariffs are "not the act of a friend". But he said Australia will refrain from imposing reciprocal tariffs.

Are any ASX 200 market sectors in the green today?

Drilling down to some specific sectors, Aussie tech stocks are falling hard in the face of the new Trump tariffs, with the S&P/ASX 200 Information Technology Index (ASX: XIJ) down 2.6%.

Finance stocks are also feeling the heat, with the S&P/ASX 200 Financials Index (ASX: XFJ) down 2.2%.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is also down 2.2% at this time, though companies focused on consumer staples are faring better amid the new Trump tariffs, with the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) up 0.1%.

Outshining them all today are ASX gold stocks. With bullion's haven status in clear display, the gold price topped US$3,146 per ounce this morning, notching another new record high. As for those ASX gold stocks, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is up a welcome 1.7% today.

What are the experts saying about the Trump tariffs?

Janus Henderson Investors' Adam Hetts believes the Liberation Day announcement is likely the opening move in lengthy global trade negotiations. But that won't keep the Trump tariffs from roiling the ASX in the short term.

"Eye-watering tariffs on a country-by-country basis scream 'negotiation tactic,' which will keep markets on edge for the foreseeable future," Hetts said (quoted by Bloomberg).

Jones Trading Institutional Services' Michael O'Rourke cautioned that pending reciprocal tariffs could continue to unsettle markets.

According to O'Rourke:

That should slow trade and raise prices squeezing profit margins. This will further slow a decelerating economy as it creates friction and distortion in global trade. I think we need to expect retaliation, which will likely lead to further escalation.

Northlight Asset Management's Chris Zaccarelli added:

The silver lining for investors could be that this is only a starting point for negotiations with other countries and ultimately tariff rates will come down across the board – but for now traders are shooting first and asking questions later.

And Federated Hermes' Steve Chiavarone said the Trump tariffs could create some stock market bargains.

"This may create enough of a selloff over the next day or so that it creates a buying opportunity," Chiavarone said.

We'll leave off with Goldman Sachs here, who's strategists advise ASX investors would do well to take the Trump tariffs in stride.

According to Goldman Sachs' portfolio strategists Matthew Ross and Tony Wu (courtesy of The Australian Financial Review):

We continue to highlight that increases in trade uncertainty should not be of great concern for Australia, especially relative to most other nations. Australia has consistently maintained one of the largest trade deficits with the US, while very few ASX firms have meaningful tariff impacts.

While Australia's trade relationship with China seems to be of concern to many investors, we have noted that the majority of our exports to China are consumed domestically and not re-exported. Therefore, as China continues to stimulate its domestic economy to offset the hit to exports, we see a strong case for Australia's overall trade impact to be very modest.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Excited couple celebrating success while looking at smartphone.
Share Market News

Buy Woolworths and these ASX dividend stocks

These shares have been named as buys for income investors by analysts.

Read more »

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Tuesday

A decent session is expected for Aussie investors today.

Read more »

Yellow rising arrow on a brick wall with a man on a ladder.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough start to the trading week for investors this Monday.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Opinions

3 great lessons I learned being an owner of Brickworks shares

I’m going to take these lessons with me.

Read more »

Magnifying glass in front of an open newspaper with paper houses.
Share Market News

Thinking of buying an ASX REIT? Check out Macquarie's top picks

The leading broker has named its picks in the sector. Here's what they are.

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX 200 stock has rocketed 86% since April?

This sky rocketing ASX 200 stock continues to defy short sellers. But how?

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Share Market News

Why BlueScope, Brickworks, Resimac, and Soul Patts shares are racing higher today

These shares are starting the week with a bang. But why?

Read more »