The Australian sharemarket is facing a turbulent Feb. 23 opening after US President Donald Trump bypassed a US Supreme Court setback to impose a 15% universal tariff on all imports.
By invoking Section 122 of the Trade Act, the White House has effectively hiked the tax on Australian exports from 10% to 15% starting Feb. 24, caught in the crossfire of an escalating global trade war.
While ASX 200 futures initially pointed to a modest gain, the president’s legal maneuver has shifted the mood toward high anxiety.
"It’s unequivocally negative news for Australia and the Aussie dollar," warned Ray Attrill, head of FX strategy at NAB.
The news threatens to snap the Australian dollar's five-week winning streak, which recently saw it hit a three-year high of US71.47 cents.
The domestic reporting season enters its final week with heavyweights like Ampol and Lendlease delivering results amid "extreme" price swings.
Furthermore, geopolitical tensions in the Middle East have pushed oil prices toward US$67 a barrel, with analysts warning that a strike on Iran could see petrol prices jump by 40 cents a litre.
While some analysts, like Atlas Funds Management's Hugh Dive, suggest exporters may simply find new markets, the RBA’s looming shadow remains the primary concern.
With monthly inflation data due Feb. 25, traders are now pricing in a 76% chance of a rate hike to 4.1% by May, cementing Australia’s position as a global outlier in monetary tightening.