“Tariffs on medicines increase costs and reduce access for patients, which is why the first Trump administration and policymakers of both parties consistently have refrained from imposing tariffs on medicines,” CSL said in a statement.
Oliver said the broader sharemarket reaction appeared overblown. “It’s certainly a knee-jerk reaction, no doubt about that. Shoot fast, ask questions later,” Oliver told this masthead.
“I think the sharemarket is signalling more concerns about Australian economic growth,” he added. “If [Trump] pushes down the path putting tariffs on everybody, then you could get broad-based retaliation around the world in a global trade war, which leads to less trade, less economic activity globally, which in turn would be less demand for our exports in particular.”
Judo Bank economists Warren Hogan and Matthew De Pasquale said the impact on the US and Canada’s inflation would be immediate but that it was too soon to tell for the impact on Australia.
“We have little to fear from direct US tariff measures. The main concern is weaker global growth and demand for our exports due to a global trade war,” said Hogan and De Pasquale in a note.
“This now looks more likely than ever, given Trump’s move and Canada’s clear retaliatory response.”
Donald Trump has signed an order to impose stiff tariffs on imports from Mexico, Canada and China, drawing swift retaliation from the country’s North American neighbours in an emerging trade war.Credit: Bloomberg
Betashares chief economist David Bassanese said global equities were facing an onslaught of simultaneous challenges.
“First came sticky US inflation and news that the Fed is in no hurry to cut rates further. Then came the DeepSeek shock, which has raised question marks over US tech valuations once again. Then on Friday came what markets have long dreaded: significant new tariffs on key trading partners and the start of Trump Trade Wars 2.0,” Bassanese said.
“Countering these negatives are the resilience of US economic growth and corporate earnings (at least for now) and reasonable hopes – prior to the new tariffs – that US inflation would likely fall further. The near-term outlook is messy to say the least and the risk of deeper correction in equity markets has escalated.”
The US should expect price increases of 0.5 per cent, which will endanger the hopes of lower inflation and Federal Reserve rate cuts this year, he added.
Loading
The miners were hit hard with BHP (down 1.8 per cent), Rio Tinto (down 2.1 per cent) and Fortescue (down 4.4 per cent) slumping. The big four banks also lost ground, led by NAB (down 2.3 per cent). CBA is down 1.5 per cent, ANZ slid 1.4 per cent and Westpac declined 1.7 per cent.
Wealth manager Magellan copped the biggest hit of the session, shedding 9.7 per cent after the latest news of executive changes at the firm led to UBS downgrading Magellan’s shares to sell.
Trump on Saturday (Sunday AEDT) placed 25 per cent tariffs on imports from Canada and Mexico and 10 per cent tariffs on goods from China. The White House provided no word on whether there would be any exemptions to the measures that could result in swift price increases to US consumers.
The tariffs have fuelled fears of a global trade war amid pledges of retaliation from the affected countries. The US president has also flagged wider tariffs, including against the European Union.
Loading
“This is the most significant trade shock since the Smoot-Hawley tariffs of the 1930s, which are widely blamed for exacerbating and prolonging the Great Depression,” said RBC chief economist Frances Donald in a note.
“This shock far surpasses the 2018 tariffs in magnitude, diminishing the value of that period as a helpful guide for the economic impact ahead. For context, in 2018, the US average import tariff rose from 1.5 per cent to roughly 3 per cent. Under the new policy, the US average tariff rate [rises] to nearly 11 per cent, the highest average ratio since the 1940s.”
Apple reversed course from market-leading gains to a loss of 0.7 per cent. The company had reported stronger profit for the latest quarter than analysts expected. Wall Street’s most valuable company, and thus the most influential on the S&P 500 and other indexes, said sales of iPhones dipped. But revenue for its services businesses, such as AppleCare and its app store, rose to a record.
KLA, a supplier to the electronics industry, initially rose after reporting profit and revenue that topped analysts’ expectations, but then closed down 0.6 per cent. The company, which credited its results on expanding artificial-intelligence and high-performance computing investments, fell 6.3 per cent on Monday. That’s when tech stocks around the world tumbled, after a Chinese upstart, DeepSeek, said it developed a large language model capable of competing with the world’s best, without having to use top-flight chips.
The disruption raised questions about whether all the investment expected for AI chips, data centres and electricity is really needed.
Shares of Nvidia, considered the poster child for the AI frenzy, fell 3.7 per cent. They dropped 15.8 per cent for the week. Its CEO, Jensen Huang, meet with Trump on Friday in Washington.
Worries that tariffs could end up driving inflation higher helped push long-term bond yields higher, including the 10-year Treasury, which rose to 4.54 per cent from 4.52 per cent late on Thursday.
“It’s not the safe haven that it normally is because these tariffs might result in higher inflation and the need for the Fed to remain on pause for longer or to reverse course and raise rates,” Stovall said.
