Markets live: ASX to rise, Wall Street surges on Donald Trump's EU tariff delay
Wall Street surged on US President Donald Trump's decision to delay a proposed tariff hike on European Union imports.
See how the trading day unfolds on our blog.
Disclaimer: this blog is not intended as investment advice.
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ABC News
26 minutes ago
- ABC News
Trump's new tariffs reveal somewhat vindictive and irrational strategy
Myanmar, Laos, Serbia and Syria. They seem unlikely targets for some of the most aggressive moves in Donald Trump's war on the global trading system. Yet these small and troubled nations are among those facing the highest tariffs from the United States in the wake of its president's slew of August 1 trade announcements. Myanmar, which mostly exports clothing to the US, and Laos, which predominantly exports electronics equipment, now face 40 per cent tariffs on the goods they sell to America, while Serbia will be hit with a 35 per cent tariff and Syria 41 per cent. None of these countries have been notably the subject of the same public Trumpian wrath as, say, Canada (35 per cent) and Brazil (50 per cent) since "Liberation Day" on April 2. And the country which is arguably the biggest target or threat to the US in terms of world trade — China — was not mentioned at all but will be engaged with in further negotiations. Having said that, there is still a 40 per cent on goods regarded as being "trans-shipped" to avoid higher tariffs (for which read "trans-shipped from China"). And the tough treatment on Friday of South-East Asian nations which are manufacturing hubs for China must be seen as an indirect assault on the regional economic superpower. In Australia, the focus on Trump's tariff announcements on Friday (AEST) was of course primarily on the "relatively" good news that we were still only facing a 10 per cent tariff, when the spectre of a 15 or 25 per cent generic rate had been mentioned by the US president in the days leading up to the announcement. The outcome somewhat took the wind out of the sails of those who have been criticising the prime minister for not getting to the White House, or into any meeting with Trump, and instead boosted the argument that there was little to be lost from staying out of his uniquely coiffed hair. Australia will enjoy the 10 per cent tariff rate being applied to those countries that buy more goods from the US than they export to America: that is, that run a trade surplus with one of the world's biggest economies. The new tariff regime starts at 10 per cent, based on trade balance, lifts to a 15 per cent rate for countries that only have a small deficit, while those with big deficits, that haven't negotiated, or that have otherwise incurred the ire of the president face this much wider and more unpredictable range of outcomes. It's worth pausing for a moment of silence to mark the momentous shift in global affairs that the Friday announcement confirms: the shift not just from a free trade ambition to a protectionist one by the United States, but a shift to a system of fairly arbitrary, vindictive and sometimes irrational decisions. Beyond that, though, the patterns in the trade deals that have been done to date — or perhaps more appropriately the lack of patterns and rigour — raise a range of other questions about their impact, and the extent to which they appear in some cases to be little more than standover tactics of lesser or greater actual import. Take the deals struck with Japan and the European Union last month. Both exemplified some striking features of the "deals" being done. In both cases, the parties documented very different understandings of the deals they thought they had done. There were also glaring holes in the deals in terms of major sectors about which there was only a conspicuous silence. For example, the EU deal was silent on wine and spirits. Most of the deals have yet to be formalised or legislated. Finally, the US has been claiming in almost all of the deals that it struck prior to August 1 that they involved massive commitments of investment in the US by the trade partners involved. For example, in Japan's case, the White House announced that Japan would create a $US550 billion fund to invest in the US, with Trump making the investment decisions and the US government receiving 90 per cent of the profits. It seemed this astonishing deal was news to Japanese negotiators who, the New York Times reported, had already made an offer (which in itself seemed extraordinary): to create a $US400 billion investment fund with half the profits going to the US government. The US president subsequently referred to the deal that he announced as a "signing bonus", which underpinned Japan "only" facing a 15 per cent tariff impost, even as doubts were aired about whether the investment would ever materialise. The NYT reported that Japan's chief trade negotiator, Ryosei Akazawa told Tokyo that the deal was that Japan would offer a blend of investment, loans and loan guarantees, totalling up to $550 billion, with profits to be allocated based on each side's committed risk and financial contribution. There have been similar scenes unfolding over possible investments from the European Union and South Korea. Equally unsettling has been the increasingly blatant intrusion of non-trade factors into the tariff decisions announced by the White House. Brazil is facing 50 per cent tariffs because Trump doesn't like the way former president, strongman and Trump ally Jair Bolsonaro is being treated by the Brazilian judicial system, where he is facing up to 40 years in prison for allegedly plotting a coup to stay in power after losing the 2022 election. By agreeing this week to a Trump demand for a ceasefire, Thailand and Cambodia appear to have ended up with lower 19 per cent tariffs they had originally been proposed. Canada appeared to be facing a more punitive tariff regime than Mexico at 35 per cent — which Trump said was due to Prime Minister Mark Carney signalling Canada would recognise statehood for Palestine. But it turns out the higher tariff rate will not apply to goods covered by the United States-Mexico-Canada trade agreement. That covers an estimated 94 per cent of Canada's exports to the US. The tariff decisions will have a very different impact to those suggested by the headline numbers in other countries too. For example, Germany may only face a 15 per cent tariff as part of the EU deal but is particularly exposed through its big automotive exports to the US. Another shock was the 25 per cent rate applied to India. This caused immediate political blowback for Indian Prime Minister Narendra Modi who claims "bestie" status with the US president but who immediately faced intense criticism at home that this elevated position had not saved India from a punitive tariff rate. What happened in India is just one of the examples of the political shock waves caused around the globe by Trump's moves, in addition to any economic impact they may have. There is considerable concern in Europe, for example, about how European Union member nations react to its deal. The federated nature of the EU structure lends itself to a lot more public debate about a deal not directly negotiated by national leaders. The concern among European political analysts this week is that the deal will play into the hands of far-right and nationalist groups in fuelling resentment against both the EU and sitting governments. It will take countries around the world some time to see how these domestic pressures play out. And then there's the question of how such a deliberately uneven playing field affects their relative competitiveness to each other, even when direct trade with the US is left out of the calculations. It feels like a certain resignation has crept into global trade discussions in the past few months. It is driven as much by a trade-off between uncertainty and certainty as specific tariff numbers. If there is one thing we seem to know about Donald Trump, it is that all that uncertainty is unlikely to end any time soon. Laura Tingle is the ABC's Global Affairs Editor.
ABC News
26 minutes ago
- ABC News
Judgement to be handed down over legality of pro-Palestinian Sydney Harbour Bridge march
A judgement due to be handed down this morning will decide the legality of a pro-Palestinian march across the Sydney Harbour Bridge on Sunday. The Palestinian Action Group was referred to the Supreme Court by NSW Police after it announced plans to march over the bridge in support of Palestinians as the war rages on in Gaza. NSW Police sought a prohibition order over the event, which would not ban people from attending and participating, but would mean those who did participate would not be protected against offences such as blocking roads or traffic. The court heard from counsel for both the Palestine Action Group and police on Friday. Under cross-examination, Acting Assistant Commissioner Adam Johnson said he had public safety concerns about the event. "Imagine a scenario where the public assembly remains authorised. In that situation, are you saying police would not facilitate safe conduct of the event?" barrister Felicity Graham, representing the organisers, asked. "We would always do our best to ensure public safety, but in these timeframes, no. We'd be unable to guarantee public safety," he replied. "It's a certainty that a very large group of people attend even if the public assembly is not authorised, do you agree?" Ms Graham asked. "It's a possibility," the witness replied. Acting Assistant Commissioner Johnson told the court the bridge would still need to be closed if the gathering was authorised. He also raised concerns about plans for attendees to first gather at Lang Park — situated on the corner of York, Grosvenor and Lang streets — to approach the harbour bridge. "Fifty thousand people at Lang Park, whether it's authorised or unauthorised, has significant public safety risks," he said. Before the hearing began on Friday, Josh Lees from Palestine Action Group told media the crisis in Gaza had not abated and it was an "urgent and horrific situation". "It's why we called it over the harbour bridge, because we need to do something bigger than what we've already done," he said. Mr Lees said the bridge had been shut previously for "much less significant reasons", including for a movie to be filmed, and said an argument that a closure required more planning time did not add up. He said the plans had attracted "unprecedented support" and claimed NSW Police had not accepted the alternative plans suggested by the group, including delaying the event for several weeks. The group took to Instagram to announce several union groups were backing the march, including the United Workers Union and the Nurses and Midwives' Association. Premier Chris Minns said on Friday the government acknowledged the demand for the march, but that the "last thing" police wanted was "chaos" in Sydney streets. "We recognise people want to protest, we're hopeful, depending on the outcome of the court case... ... [that] common sense can prevail and people are given an opportunity to express their voice," he said. The "March for Humanity" is scheduled for Sunday afternoon. Justice Belinda Rigg will hand down her verdict at 10am Saturday.
The Age
an hour ago
- The Age
‘Not woke stuff': Trump administration bars US officials from Australia defence talks
Confidential talks canvassing strategies to prevent a war with China and deepen the United States-Australia alliance have been scrapped after the Trump administration abruptly blocked senior defence officials from travelling to Canberra next week. National security experts fear an array of exchanges between US and Australian counterparts will dry up following a sweeping Pentagon edict, announced this week, suspending all participation in think tank and research events because it suspects they do not align with Donald Trump's 'America First' agenda. The edict comes as the US reviews the future of the AUKUS nuclear-powered submarine pact and Prime Minister Anthony Albanese prepares for a potential first meeting with Trump in September after months of no discussions between the pair. US and Australian officials were planning to meet some of the nations' top defence experts in Canberra on Monday and Tuesday next week for the fifth round of the US-Australia Indo-Pacific Deterrence Dialogue, but the event was suddenly called off on Wednesday when the American officials were told they were no longer allowed to travel to the event. Around 40 American and Australian national security figures would have gathered to discuss issues such as military integration, nuclear deterrence and strategic interaction with China at the closed-door dialogue, which involved months of planning. The so-called '1.5 track' event brings together current military leaders, government officials and diplomats with non-government researchers. Discussions are held under the Chatham House rule to foster frank discussions on sensitive and complex topics, with the participants' identities kept secret. This would have been the first time the dialogue has been held since Trump's re-election. Chief Pentagon spokesman Sean Parnell said in a statement: 'In order to ensure the Department of Defence is not lending its name and credibility to organisations, forums, and events that run counter to the values of this administration, the Department's Office of Public Affairs will be conducting a thorough vetting of every event where Defence officials are invited to participate.' Rory Medcalf, head of the Australian National University's National Security College, said the 'cancellation of this dialogue is disappointing and counterproductive for alliance interests'.
