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An Australian Securities Exchange (ASX) that had already factored in negative impacts from US tariffs has fallen further today now that the policy is a reality, as investors grapple with the impacts for companies that are deeply embedded into global supply chains and financial markets.
A tariff of 10 per cent on Australian goods may be comparatively lower than others, but the ramifications of higher tariffs on the broader economy are already taking their toll as investors search for security. Shares in Perth Mint Gold (ASX: PMGOLD) are up 1.62 per cent, crossing the $50 mark.
The All Ordinaries is down 1.24 per cent at the time of writing but indices for specific sectors have fallen more sharply such as IT (-2.53 per cent), energy (-2.29 per cent) and real estate (-2.05 per cent).
Consumer staples, driven by Coles (ASX: COL) and Woolworths (ASX: WOW), are bucking the market trend with the index up 0.59 per cent.
Online luxury dropshipper Cettire (ASX: CTT) has seen its shares fall by almost 12 per cent as the company clarified that 41 per cent of recent total gross sales were from goods sold in the USA that came from the European Union, which is now subject to a 20 per cent tariff on its goods.
Cettire clarified that US de minimis exemption meant that shipments below $US800 would continue to be exempt from duties, but its average order sat at around US$514.
"The company notes that changes to US tariffs on overseas imports will likely impact the majority of online and bricks and mortar luxury retailers, as a significant proportion of luxury items are manufactured in the EU," Cettire stated.
"Cettire is currently assessing the full implications of these tariff changes on the company and its global operations, noting that several major luxury brands have indicated they would seek to increase pricing of luxury goods in the US market to mitigate possible tariff changes.
"Cettire began identifying strategies to prepare for and mitigate potential changes to the US tariff regime throughout calendar 2024 and the first quarter of 2025. The company’s localisation strategy has underpinned a continued broadening of the geographic revenue base, which Cettire expects to continue."
Fast-growing wealth management company Netwealth Group (ASX: NWL), which has not released a statement on tariffs, saw its shares drop 8 per cent today, likely due to its exposure to volatile financial markets.
Personal protective equipment and safety solutions group Ansell (ASX: ANN) has taken a 15 per cent hit today, or approximately $500 million to its market capitalisation, given its manufacturing presence in multiple countries that will be subject to very sharp tariff rises such as Malaysia, Sri Lanka and Thailand.
Disproportionate falls have also been seen for ARB Corporation (ASX: ARB) at 6.45 per cent, Zip Co (ASX: ZIP) at 6.43 per cent, and Breville (ASX: BRG) at 5.95 per cent.
Breville released a statement today clarifying that 45 per cent of its products are sold in the USA, while 90 per cent of its products by value are manufactured in China - a country whose goods will be subject to a 34 per cent tariff under the new regime. The remainder are produced in the EU, Mexico and Taiwan.
"The group is well progressed on a project to diversify its manufacturing base. The initial target locations are Mexico, Indonesia and Cambodia," the company stated.
Mexico was not included in today's announcement as it, along with Canada, was slapped with a 25 per cent tariff on 4 March. However, United States-Mexico-Canada Agreement (USMCA) compliant goods receive preferential treatment.
Indonesia and Cambodia face tariffs on their goods of 32 per cent and 49 per cent respectively in the US.
"This project may adjust as facts on the ground evolve. Regardless of the ultimate location, the group will benefit from added geographic diversification in its manufacturing base," Breville stated in today's release.
"The group does not anticipate any material impact from the tariffs announced today on its FY25 result and reiterates its FY25 guidance for EBIT growth of between 5 per cent and 10 per cent.
"Subject to the current uncertainty and fluidity in the economic environment, US tariff implementation and iteration, coupled with any country-specific responses, it is likely that the group’s input costs will increase for FY26."
Treasury Wine Estates (ASX: TWE) has witnessed a less pronounced fall of 2.09 per cent in its share price, after advising the market that for its Treasury Americas division only 15 per cent of the wine comes from Australia and New Zealand.
Worth around $35 million a year, this wine is mostly for the 19 Crimes and Matua brands, and are imported into the US as bulk wine and packaged locally in the USA. The Treasury Americas division accounts for around 36 per cent of group earnings.
Business Council responds
In other reactions to the news, the Business Council of Australia (BCA) has expressed deep disappointment at the size and scale of global tariffs imposed by the United States on Australia and other trading nations.
Business Council chief executive Bran Black said these tariffs would hurt economic growth but urged a measured response, recognising the importance of free trade to our prosperity.
“The United States is a long-standing friend and ally and we’ve historically stood together through thick and thin, and so every Australian should be disappointed by these tariffs,” Black said.
“We don’t support retaliatory tariffs and strongly urge against them, because there are no winners in a trade war, which would only risk making our situation worse by forcing Australians to pay more and reducing job security.
“As a trading nation, free and open access to global markets is critical for Australia, especially as one in every four of our nation’s jobs relies on trade.”
In the aftermath of US Donald Trump's announcement, Australian Prime Minister Anthony Albanese said Australia would not be drawn into a "race to the bottom" and would not impose retaliatory tariffs.
The Business Council's chief executive said work would continue with officials in Australia and Washington D.C., along with the Government and Opposition.
"We’ll continue to engage with Australian businesses and directly with our contacts and counterparts in Washington D.C. with a view to securing the exemption from these tariffs that our nation deserves," he said.
“The Government, Ambassador Rudd and our officials have worked tirelessly behind the scenes – against great odds – and it’s clear these tariffs have been widely targeted.
“There are so many reasons why Australia should be exempt from any tariffs, including that the US has a trade surplus with us and the existence of long-standing cultural and military ties between our countries, especially now with the AUKUS agreement.”
Black said that with the world now a more uncertain place, it was more important than ever that policymakers prioritise making Australia a more competitive place to do business and attract investment.
"Australia should focus on controlling what is wholly within our power to control, and that means doing everything we can to be an attractive destination for global capital," he said.
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