Trump’s ‘Liberation Day’ tariffs wipe trillions off markets

Good morning. Here's what happened overnight and what you need to know today.

---

1.

Red wall: President Trump’s new tariff plan sent US markets into their steepest decline in more than two years Thursday, with stocks losing roughly USD2.7 trillion ($4.26 trillion) in value, stoking fears that Trump’s tariffs will push the economy into a recession. The Dow was down 3.3% in late afternoon trading. The Nasdaq dropped 5.5%, led by big declines in companies dependent on overseas products and manufacturing. Nvidia (-6.6%) and Apple (-9.3%) were down a combined USD470 billion in market value. Retailers, banks and private equity firms were also badly hit. A dollar gauge sank 2.1%—the most on record—as the euro, yen and Swiss franc surged. Oil prices dropped over 6%, while gold also fell, as investors sought safe havens in utilities and Treasuries. French President Macron said Europe is weighing retaliation on US tech services, while Canada announced 25% auto tariffs in response. Some goods and countries are exempted, including USMCA-compliant products from Mexico and Canada. Some economists warned the tariffs could push inflation close to 5%. The moves also come ahead of the jobs report tomorrow. A bipartisan Senate bill was introduced overnight that would require tariffs to expire after 60 days unless approved by Congress, which could also vote to terminate them at any time. Intel shares rebounded to be 4.5% higher after a report by The Information said the company had tentatively agreed with TSMC to form a JV to operate Intel’s chipmaking facilities, with TSMC taking a 20% stake. (Bloomberg)(FT)(WSJ)(Capital Brief)

2.

Paper tiger: Donald Trump’s sweeping tariff package was billed as protection for American industry but experts warn it could unintentionally strengthen China’s economy and trigger global ripple effects. Announced on ‘Liberation Day’, the tariffs took effect from midnight, with a baseline 10% applying to all countries, except Canada and Mexico, and a 34% blanket tariff on China. Previously announced measures also include a 25% tariff on foreign-made cars and trucks, with further duties on automotive parts to follow in a month. Australia faces only the minimum 10% tariff on its relatively few US exports. Prime Minister Anthony Albanese pledged to double down on the Future Made in Australia strategy if re-elected, promising support for tariff-affected industries and five international missions to diversification markets within 100 days. Economists told Capital Brief that global responses will shape the ultimate impact on Australia. “Depending on how it responds, it could soften the blow here.” Committee for Economic Development of Australia chief economist Cassandra Winzar said. (Capital Brief)

3.

China’s response: China condemned Trump’s sweeping new tariffs as “unilateral bullying” and vowed to take “necessary measures to resolutely safeguard legitimate rights and interests”. The Chinese commerce ministry urged the US to immediately cancel the tariffs, warning that “there are no winners in trade wars”. Starting 9 April, Chinese imports will be subject to a 34% tariff on top of an existing 20%, bringing the total to 54%. China’s foreign ministry said the move “seriously violates WTO rules” and undermines the multilateral trading system. Beijing has not yet specified its response but has previously targeted US exports, restricted critical mineral supplies and warned of “resolute” countermeasures if Washington continues to apply pressure. Trump also signed an executive order closing the “de minimis” loophole that had allowed low-value packages from China to enter the US duty free. Wang Yi, China’s top diplomat this week said the US must remove tariffs imposed earlier this year before any talks can take place. Meanwhile, the Associated Press reported that Washington has revived Cold War-era ‘non-fraternisation’ rules, banning US government personnel in China from romantic relationships with Chinese citizens. (NYT)(Reuters)(NBC)

4.

Scyne cuts: Scyne Advisory will slash about 10% of staff in a major cost-cutting drive as work in the professional services sector dries up, according to media reports. The Australian said staff were told on Thursday afternoon, with insiders warning up to 150 roles could go. Other sources told the paper 70 jobs were expected to go this week. The cuts include about 30 roles in the education consulting team and come as the firm merges its digital division into a broader transformations practice, The Australian Financial Review reported. CEO John Ball was quoted in the AFR saying the restructure would shift Scyne away from generalist consulting towards tech-focused projects. Scyne was created in 2023 when PwC sold its public sector consulting arm to Allegro Funds for $1 after being black-listed from government contracts. Since the PwC tax scandal, governments have cut external contractor spending. (Capital Brief)(AFR)(The Australian)

5.

RBA warnings: The Reserve Bank of Australia warned pension funds’ surging appetite for foreign and private assets potentially poses a risk to the country’s financial system. In its half-yearly Financial Stability Review, the RBA said almost half of the $4.2 trillion superannuation industry’s assets are now invested offshore, and about a fifth are in private markets, including long-term assets such as airports and toll roads. A large, sustained drop in the Australian dollar could lead to margin calls and renewed foreign exchange hedging. With millions of Baby Boomers set to retire, net inflows to pension funds are expected to decline over time, creating potential liquidity pressures if large withdrawals occur during a crisis. The RBA said strong governance is needed to oversee liquidity and operational risk and expects APRA’s financial system stress test this year to help understand systemic risks. It also warned that US trade policies could lift financing costs. “If macro-financial risks were to materialise in China, stress could spill over into the global financial system, including Australia, via trade channels and increased risk aversion in global financial markets,” it said. (RBA)(Reuters)(AFR)(Bloomberg)

6.

Same stance: Peter Dutton said he will not repeal Labor’s ‘same job, same pay’ bargaining laws that have infuriated businesses across the country. Despite mining companies ratcheting up pressure on the opposition leader, Dutton said “I understand the difficulty for some of the companies, who are facing already a fairly militant union sector and want reforms, but that’s our position.” The move follows a report by Labor-aligned think tank published Thursday that found the rules led to higher wages for retail workers, meat workers and miners. The labour-hire laws have prompted unions to establish themselves in the Pilbara for the first time in decades, with Rio Tinto currently fighting Paraburdoo workers’ petition for collective bargaining. In response to Dutton’s decision, Industrial Relations Minister, Murray Watt, said: “If you believe Peter Dutton on ‘same job, same pay’, I’ve got a mine shaft to sell you.” (AFR)(Guardian)

7.

Le revenge: France is angling for the European Union to hit US tech firms as part of the bloc’s response to President Donald Trump’s tariffs. After Trump unveiled plans to hit the EU with 20% tariffs on exports to the US (on top of auto, steel, aluminium tariffs), a French Government spokesperson said that the country wants to “attack services” including US digital services. President Macron has previously said that while the US has a deficit with the EU for goods, it runs a large surplus in services. France could be looking to extend its digital services tax on big tech which was introduced in 2019. The Union has given itself four weeks to negotiate with Trump in the hopes that the US backs down from the tariffs, before responding with countermeasures. The EU will vote on proposed duties on up to €26 billion of US goods to counter the steel and aluminium duties next week. Late on Thursday Macron urged companies to pause US investments. (Capital Brief)(Reuters)(FT)(Bloomberg)

8.

Barrel barons: OPEC+ will make a bigger boost to oil supply quotas than anticipated in May, adding an extra two months’ worth of oil tranches. The cartel will add 411,000 barrels per day to the market from May, beginning its “gradual and flexible” return to the 2.2 million barrels per day quotas from 1 April. Brent futures were down almost 7% while West Texas crude futures dropped just over 7% in early US trading, reacting to the OPEC news and Trump’s global tariffs. The acceleration of the cartel’s production increase will add pressure on OPEC+ members that have been exceeding their supply quotas, notably Kazakhstan. Russia ordered the Black Sea terminal handling Kazakhstan's oil exports to close two of three moorings amid the row. Last month the International Energy Agency warned that macro conditions underpinning oil demand will lead to a larger than anticipated supply surplus. (Capital Brief)(Capital Brief)