Australian shareholders face $115bn loss as trade war escalates and global markets plunge, prompting potential interest rate cuts.

In Short

Australian shareholders face a $115 billion loss as global markets decline due to rising trade tensions from US tariffs.

Financial analysts expect potential interest rate cuts, while market strategist David Di Pilla warns of long-term effects and significant local share drops.

Australian shareholders face a $115 billion loss as global markets enter a bear phase due to rising trade tensions linked to US tariffs imposed by President Trump.

The Australian dollar dropped below US60 cents after China announced retaliatory tariffs of 34% following Trump’s significant tariff hike on Chinese imports.

Financial analysts anticipate potential official interest rate cuts, with Westpac suggesting a May decrease is probable. ANZ’s Adam Boyton indicates a possible 50 basis point cut, while HSBC predicts a total reduction of 100 basis points by early 2026.

Major plunge

The ASX 200 futures point to a 4.3% plunge in local shares on Monday, indicating a substantial drop not seen in over a year.

Major US indices, including the Dow Jones and S&P 500, experienced severe downturns after the tariff announcements. Companies such as Tesla and Apple saw significant declines, while Ford had a modest gain.

Wilson Asset Management’s Matthew Haupt questioned whether Trump’s tariff strategy reflects a genuine shift or a negotiation tactic, anticipating ongoing uncertainty until clearer strategies emerge from the US administration.