The Daily Aus
The stock market crash, explained
Apr 7, 2025
Greg Jericho, Chief Economist at the Australia Institute, dives into the recent turmoil caused by US tariffs, which wiped over $100 billion from the Australian stock market. He discusses the psychological impact of economic fear on market behavior and the implications for everyday Australians. Jericho also explains trade deficits using a clever apples analogy and examines how such tariff policies may lead to global economic uncertainty. The conversation highlights the potential for recession and its effects on employment and consumer spending.
16:30
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Quick takeaways
- The recent US tariffs on imports have resulted in over $100 billion being wiped from the Australian stock market due to heightened investor uncertainty.
- While Australian consumers may not feel immediate effects, businesses dependent on US exports could face a significant decline in demand as prices rise.
Deep dives
Impact of Tariffs on Trade
A recent announcement by the US President introduced tariffs on all imports, including a flat 10% tax on Australian goods. Tariffs are taxes imposed on imports, making it more expensive for foreign countries to sell goods in the US. This move aims to address a perceived trade deficit, which Trump argues undermines American interests by encouraging foreign imports over domestic products. The intention is that these tariffs will motivate American consumers to purchase more locally-made goods, effectively reducing reliance on international suppliers.
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