Trump's tariffs set to take effect

Hi folks, Rich Henderson here from Bloomberg's Melbourne bureau. Hold on to your hats, it's tariff day. First up...Today's must-reads:• Trum

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Hi folks, Rich Henderson here from Bloomberg's Melbourne bureau. Hold on to your hats, it's tariff day. First up... Today's must-reads: • Trump increases top China tariff to 104% • Albanese beats Dutton in election debate • Consumer confidence tanks on tariff turmoil

What's happening now

Donald Trump increased the top tariff rate on some Chinese goods to 104% prior to the levies taking effect midnight Tuesday in Washington — 2pm Wednesday in Canberra. The US administration has lined up negotiations with trading partners but the higher rate on China reignited fear across financial markets and dimmed optimism that a trade war would be avoided.  Prime Minister Anthony Albanese has beaten Peter Dutton in the first election debate. Albanese was picked as the better candidate by 44% of undecided voters that made up the audience over the Liberal Party leader's 35%.  Colonial First State is hoping to take advantage of the market selloff sparked by Donald Trump's trade war by adding to its portfolio of unlisted assets like infrastructure and private equity.  Jim Chalmers has called an emergency meeting with bank chief executives and the central bank governor to discuss trade tariffs and market volatility. The Treasurer will meet with Reserve Bank Governor Michele Bullock and heads of Commonwealth Bank, National Australia Bank and ANZ, he said Tuesday.  Consumer confidence fell to a six-month low in a sign Australians are becoming worried about Trump's proposed tariffs. A Westpac gauge of sentiment dropped 6% in April — a reading that included a 10% slump among respondents surveyed after Washington announced reciprocal trade levies.  Felicity Deane of Queensland University of Technology says Australia's economy is at risk of getting caught in a tit-for-tat dispute between Washington and Canberra's largest trading partners on Bloomberg's Australia Ahead. Click the photo below to watch. Watch Felicity Deane, professor of trade law at Queensland University of Technology speaking on Bloomberg TV here.

What happened overnight

Here's what my colleague, market strategist Mike "Willo" Wilson says happened while we were sleeping… US stocks fell for a fourth day and the dollar resumed a decline in view of Trump doubling down with planned 104% tariffs on Chinese goods beginning at midnight in Washington. The Aussie is lower as a darkening outlook prompts calls for high level emergency talks and the potential of a 50 basis point RBA cut next month. This is something the RBNZ may seriously consider in its interest rate decision to be released later today. Both currencies face escalating downside risks. Scott Bessent highlighted the prospect a series of deals with US trading partners could emerge, in an attempt to douse worries about the economic hit from reciprocal tariffs.  Heavy selling in US stocks sent one JPMorgan gauge that tracks the risk of recession to 79%. The measure focuses on moves in small US companies whose fortunes are closely tied to the economy. Shares in these companies fell sharply as investors began to factor in the effect of a trade war, in turn increasing the risk of recession.  A weak auction in Treasuries fanned concerns that the haven status of US government debt is beginning to show cracks. Treasuries fell for a second day after the first of three auctions planned for the week drew lackluster investor demand.

What to watch

• 12 p.m. Sydney time: Reserve Bank of New Zealand official cash rate

One more thing...

Only months ago, hedge fund manager Bill Ackman celebrated Trump's victory, predicting "the most pro-growth, pro-business, pro-American" administration he'd seen in his adult life. By last weekend — after nearly $6 trillion had been wiped out in an epic two-day market rout, and with more pain to come — Ackman launched into mea culpa mode. "I don't think this was foreseeable," the hedge-fund mogul posted on X. "I assumed economic rationality would be paramount." Bill Ackman, chief executive officer of Pershing Square Capital Management LP Photographer: Jeenah Moon/Bloomberg

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