Good morning. Here's what happened overnight and what you need to know today.
1.
Tariff wave: US President Donald Trump said a new 50% tariff on all copper imports will be announced Tuesday (Wednesday AEST), and previewed tariffs of up to 200% on pharmaceuticals. Speaking during a Cabinet meeting, Trump said, “Today we’re doing copper,” and added, “I believe the tariff on copper we’re going to make it 50%.” He did not specify when the tariff would take effect. His comments follow a Section 232 investigation into copper imports ordered in February. Copper futures in New York surged as much as 17% following the remarks. Trump also said the US will soon impose tariffs of up to 200% on pharmaceuticals, but companies would be given about a year to a year and a half to reshore supply chains before they come into effect. He said tariffs on semiconductors will also be announced soon but did not provide any details. Trump also said he was two days from sending a letter to the EU, adding “a letter means a deal”. (Capital Brief)(The White House)(WSJ)(Bloomberg)
2.
Red herring: Shortly after the RBA put an interest rate change on ice for another month, pending further information, Michele Bullock stressed the central bank’s main offshore focus is not the US — it's China. Because while Donald Trump's tariffs are putting downward pressure on prices in Australia, the RBA governor says a “big chunk of uncertainty” will persist until China finalises its response to the US President’s economic disruptions. While Bullock said the trade barriers are “partly what’s driving some of the deflationary impact in our forecast”, Australia will not “be anywhere near as badly impacted as some countries because we’re not as directly linked to the United States and our fortunes are much more linked to China”. If China – Australia's largest import and export trading partner – reacts by implementing “fiscal and monetary stimulus” to keep its growth going, that will “help to cushion for us”. (Capital Brief)
