EDITORIAL: Donald Trump’s financial mayhem hits Australians hard

There was nowhere to hide as the destruction wreaked by Donald Trump’s “reciprocal” tariffs reached the Australian stock market.

The ASX plunged more than 6 per cent at the open of trade on Monday. Despite a recovery throughout the day, the panic still wiped $100 billion off the value of the local market.

All sectors were affected, with miners and the big banks taking a beating.

Even gold stocks, traditionally a safe haven for investors in times of volatility, copped a battering.

The Aussie dollar fell below US60c for the first time since the height of COVID panic in 2020.

It was undeniable, incontrovertible financial mayhem.

We’d known it was coming, having watched Wall Street shed trillions in value late last week.

But there was nothing that could be done to stop the rout rolling through here too.

Mr Trump, the instigator of all this turmoil, was unrepentant.

“I think your question is so stupid,” Mr Trump said when asked if there was a limit to the market pain he would tolerate.

“I don’t want anything to go down, but sometimes you have to take medicine to fix something.”

And every single one of us is being told to pinch our noses and gulp.

Australians’ retirement balances will take a heavy hit as a result of Mr Trump’s trade war.

This is going to hurt.

Treasurer Jim Chalmers was doing his best to put a positive spin on things as the sea of red rose ever higher.

Australia was in a good position to weather the tariff storm, he said.

In an attempt to calm the market and convince panicked investors the sky was not about to fall in, Dr Chalmers released Treasury modelling that showed the impact of the tariffs should be “modest”, leading to a 0.1 per cent decline in Australian GDP and a 0.2 percentage-point increase in inflation in 2025.

And in good news for mortgage holders, markets are now expecting the RBA to make four interest rate cuts this year, with the potential for a 50 basis point cut at the bank’s next meeting in May.

And, predictably, Dr Chalmers jumped at the chance to use the volatility to Labor’s political advantage.

“Australia is better placed and better prepared than our peers,” he said. “This would be the worst time to risk a change of government, to a Coalition government, which would make wages lower, taxes higher, and who has secret cuts to pay for nuclear reactors.”

Also predictable was the fact that the Liberals were again nowhere near the issue, with Opposition Leader Peter Dutton backflipping on, and apologising for, his policy to force public servants enjoying working from home arrangements back into the office.

Once again, the Coalition has found itself unable to match the ruthless and polished Labor spin machine.

Economic uncertainty during an election campaign can have two opposite outcomes: it can push voters to make a change, or it can push them to stick with what they’ve already got.

With a month left in this campaign, voters are starting to think: better the devil you know.