Donald Trump’s brutal nine-word advice after US tariffs send global economy into meltdown
Donald Trump has offered nine words of advice as his broad-based tariffs wiped out $180billion from the Aussie share market in early trade.
The Australian share market has plunged by 6.4 per cent during the first 10 minutes amounting to $178billion, in the worst start to a session since the Covid pandemic five years ago.
But with financial markets in meltdown, the American President has offered a brutal bit of advice as share markets suffered plunges that were comparable with March 2020 and October 1987.
‘Sometimes you have to take medicine to fix something,’ he told reporters aboard Air Force One.
Key banking, tech and mining stocks suffered the biggest falls on Monday – with BHP and the Commonwealth Bank both plunging upon opening – in the wake of Trump‘s tariffs.
The benchmark S&P/ASX200 dived 6.4 per cent during the first 10 minutes of trade, sinking to 7,11.30 points, which was even worse than the futures market prediction of a 5.11 per cent drop. But by noon, the losses had moderated to 3.81 per cent.
The Commonwealth Bank, Australia’s biggest home lender, saw its share price fall 8.5 per cent to $140.90 during the 40 minutes of trading.
Mining giant BHP fell 9.13 per cent to $33.46 as iron ore player Fortescue shed 9.02 per cent to $13.51.
Donald Trump has offered nine words of advice as his broad-based tariffs wiped out $180billion from the share market in early trade
Tech stocks are bleeding with Life360 plunging 10.99 per cent in early trade to $16.10 for stock that last year tripled in price.
ZipCo, Australia’s best performing stock in 2024, saw its share price plummet by 12.45 per cent to $1.12.
Meanwhile, the Australian dollar has fallen below 60 US cents for the first time since the start of Covid in March 2020, stirring fears of higher inflation as imports become more expensive.
Moomoo chief commercial officer and market strategist Michael McCarthy said this was a sign global investment sentiment was under threat.
‘The Aussie dollar, if nothing else, is signalling we are in crisis mode already,’ he told Daily Mail Australia.
‘A lot of people have been talking about buying dips – that’s worked very well for people over the last few years but the Aussie dollar is very clearly saying now is not the time.’
The currency’s fortunes are tied to global growth sentiment, with commodities Australia’s biggest exports.
The Australian dollar is now in a worse position than the aftermath of American investment bank Lehman Brothers collapsing in September 2008, which led to the Reserve Bank intervening in the currency market to keep it above 60 US cents.
The Australian share market has plunged by 6.4 per cent during the first 10 minutes amounting to $178billion, in the worst start to a session since the Covid pandemic five years ago
Mr McCarthy said the imposition of new American tariffs, including 34 per cent on China and 10 per cent on Australia, had stirred global recession fears and a revival of 1970s-style stagflation where inflation and unemployment are both high at the same time.
‘It’s the tariffs – there’s no two ways about it,’ he said.
‘The concern here is stagflation and the tariffs feed both sides of that equation in that tariffs increase prices, lifting inflation, and also gum up the global economy.
‘So, a slowing economy and rising prices is an economic disaster for everyone and that’s why the market are repricing so aggressively because the perception of what 2025 looks like has changed enormously, particularly since the introduction of tariffs.’
Mr McCarthy said financial markets now regarded a global recession as a one-in-two chance.
‘A real risk: some global strategists are now rating it as a better than 50 per cent chance that we’re heading into a global recession,’ he said.
‘If the global economy, particularly the US and China, are under pressure, then it’s inevitable that the Australian economy will be under pressure.’
Tech stocks are expected to fare particularly badly on Monday.
Wall Street often sets the tone for the Australian Securities Exchange, with the benchmark S&P500 in New York plummeting by six per cent during Friday trade (US President Donald Trump is pictured, right, with billionaire Elon Musk, left)
‘Growth-exposed stocks are particularly vulnerable today so that means the previously glamorous tech stocks are likely to be under severe pressure,’ Mr McCarthy said.
‘Those formerly glamorous, high-tech stocks will be at the forefront of the selling but growth-exposed – particularly things like minerals – are also likely to be under real pressure.’
Gold on Friday also fell from record high levels of $US3,155, with no segment of the Australian share market likely to be unscathed today.
‘It’s very unlikely any will escape,’ he said.
Coles and Woolworths bucked the downturn on Friday.
‘Here in Australia and in the US as well, the only stocks to perform well were those very steady domestic businesses like supermarkets and home retailers,’ he said.
But on Monday morning, Woolworths fell 2.38 per cent to $30.39 as Coles dropped 2.08 per cent to $20.69.
Billionaire Elon Musk is reportedly so incensed with the Trump Administration tariffs he is expected to quit as post running DOGE, the Department of Government Efficiency tasked with cutting $US1trillion worth of government spending.