Trump’s 145% Tariff “Nuclear Bomb” Triggers Global Financial Tsunami: A Deep Dive into Risks and Opportunities in the Australian Property Market

1. Global Market Turmoil

U.S. President Donald Trump has stunned the world by launching a series of “tariff nuclear bombs,” imposing total tariffs of up to 145% on Chinese imports, instantly triggering panic across global financial markets. Asia-Pacific stock markets plummeted on “Black Monday,” with the Hang Seng Index in Hong Kong plunging 3,000 points—its largest single-day drop in history. Classic stills from the “Ding Hai” stock market crash drama resurfaced across Facebook, symbolizing investor anxiety. The Australian dollar also took a nosedive, hitting a five-year low and falling to HKD 4.62.

2. Australia’s Economic Challenges

Under mounting economic pressure, the Reserve Bank of Australia is expected to kick off a new cycle of interest rate cuts. I’ve received countless WhatsApp messages and emails asking: “Miss Alison, what should we do? Is this the end of the world? Are we heading into another Great Depression? Is World War III about to break out? Will the Australian housing market crash? Should we start stockpiling food?”

Let me just say this: stay calm! Today, I’ll break down the background and implications of this tariff war, and more importantly, analyze how it might impact the Australian property market. Should we move forward or hold back? The end of one economic era marks the beginning of another. In every crisis, there are both risks and opportunities. Are you ready?

3. The Background of the Tariff War

Trump’s stance on the tariff war has been shifting back and forth. Every time I scroll through Facebook, I see different updates, causing global financial and investment markets to experience extreme volatility and catch investors off guard.

On April 5, Trump abruptly announced a 10% import tariff on most countries, and a whopping 104% tariff on Chinese goods. This announcement instantly sent shockwaves through global markets, causing U.S. and Asia-Pacific stock indices to tumble—Hong Kong’s Hang Seng Index was hit the hardest. On Black Monday (April 7), the index plummeted by 3,021 points, its largest single-day drop ever, while Facebook was flooded with “Ding Hai” meme throwbacks.

But then, in a dramatic U-turn, on April 10, Trump posted on social media that tariffs would be temporarily suspended for 90 days for over 75 countries, and the “reciprocal tariffs” would be slashed to 10% during the period. However, it became clear that these tariff measures were largely targeted at China.

China quickly retaliated, announcing increased tariffs on U.S. goods, prompting the U.S. to raise tariffs on Chinese products even further—to 125%. Coupled with an earlier 20% tariff related to fentanyl announced in March, the total U.S. tariffs on China now amount to 145%.

4. International Reaction and Global Impact

China promptly filed a complaint with the World Trade Organization (WTO), accusing the U.S. of violating international trade rules. The European Union also expressed readiness to implement countermeasures. Canadian Prime Minister Justin Trudeau warned that these tariffs would harm both the Canadian and American economies.

Even within the U.S., business groups voiced concerns, warning that these tariffs would significantly raise the cost of living for American consumers. WTO Director-General Ngozi Okonjo-Iweala warned that the escalating trade tensions between the U.S. and China could slash trade volumes between the two countries by as much as 80%, and over the long term, drag down the entire global economy.

5. Three Major Impacts on the Australian Property Market

As a property expert in the Australian real estate market, I can tell you that this tariff war will have a complex impact on Australia's housing sector. It can best be described as a “tug of war.” The three main effects are: the depreciation of the Australian dollar, potential interest rate cuts, and a surge in construction costs.

5.1 Rising Construction Costs

Last Wednesday, Trump suddenly announced the imposition of at least a 10% import tariff on many countries, including Australia. Eleanor Creagh, Senior Economist at REA Group, expressed concern that construction costs may soar. She warned that if the prices of building materials rise, the cost of new homes and renovation projects may increase significantly.

According to data from the Australian Bureau of Statistics, since the outbreak of the pandemic in 2019, the cost of residential construction in Australia has already risen by more than 28%. The tariff war is further aggravating the situation, which is a severe blow to the already recovering construction industry.

The rise in construction costs not only affects new home prices but also impacts the housing supply. Think about it — no developer wants to take a loss. If costs rise too much and profit margins shrink, they may postpone or cancel projects, reducing the supply of new homes. Less supply naturally leads to upward pressure on property prices. In other words, the burden of rising construction costs will eventually fall on the buyer, pushing property prices higher.

5.2 Interest Rate Cuts on the Horizon

If global economic growth slows, the Reserve Bank of Australia may accelerate interest rate cuts. Federal Treasurer Jim Chalmers expects the RBA could cut rates by 50 basis points as early as next month, and possibly cut rates four times this year. He also stated that tariffs might slow Australia’s economic growth by about 0.1%, while pushing inflation up by around 0.2%.

Tim Lawless, Research Director at CoreLogic, said that if the rate is cut by 50 basis points (0.5%) in May and another 100 basis points (1%) by the end of the year, it could be a positive factor for the property market. Lower rates mean lower mortgage costs and increased borrowing capacity. After enduring two years of high interest rates, a rate cut could bring more buyers into the market. With an already tight housing supply, this could drive prices even higher.

Although rate cuts theoretically stimulate the housing market, Creagh also cautioned that current market uncertainties might affect buyers’ confidence, especially when it comes to major decisions like buying property.

5.3 AUD Hits a Five-Year Low

The tariff war triggered a sharp drop in the Australian dollar, hitting a five-year low. At one point, the AUD fell to 4.62 against the Hong Kong dollar. For those holding AUD, this depreciation means a loss in net worth. But for overseas investors holding USD, RMB, or HKD, Australian real estate has suddenly become much cheaper — like a built-in discount on property.

According to Bloomberg data, the AUD-HKD exchange rate peaked on February 24, 2021, at 1 AUD = 6.18 HKD. After Trump launched the tariff war in April 2025, the AUD plunged to 1 AUD = 4.62 HKD — a depreciation of 25.2%, or essentially a 25% discount.

Let’s take a typical example of a median-priced property in Sydney valued at around AUD 1.5 million:

2021 peak exchange rate cost: 1,500,000 AUD × 6.18 = HKD 9,270,000
2025 post-tariff war cost: 1,500,000 AUD × 4.62 = HKD 6,930,000
Difference: HKD 2,340,000

6. Investment Opportunities Amid Crisis

You might ask: Is this tariff war a threat or an opportunity? Although it appears to have thrown the market into chaos, it may actually present opportunities within crisis. For well-capitalised investors, this trade war could open up new investment windows.

With mounting pressures such as a falling Australian dollar, potential interest rate cuts, and rising construction costs, property prices may indeed face upward pressure—but likely in a more moderate fashion. For long-term investors, this could be a good time to consider properties with high rental growth potential. Why? Because the tariff war may trigger inflation, and rents typically rise in tandem with inflation. So, purchasing a property with solid rental yields could serve as a hedge against inflation risks.

Australia, with its stable political environment and sound legal system, could become a safe haven for global capital in times of uncertainty. Many international investors might shift their funds into relatively secure markets like Australia, especially into tangible assets such as real estate.

However, for investors with limited funds, extra caution is necessary. In turbulent economic times, even full-time employees might face job insecurity. One must be well-prepared and financially stable before making big moves like property purchases. Make sure you have enough cash flow for your living expenses before entering the market.

7. Historical Lessons & Future Outlook

One of the biggest concerns among investors is whether the global economy might enter a Great Depression. If we turn back the pages of history, in the 1930s, the U.S. raised average import tariffs by 50%, which triggered a global trade war and indirectly led to the Great Depression. Some historians even consider it a contributing factor to the outbreak of World War II.

But how is today different from the 1930s?

First, today’s global economy is far more interconnected. Countries now rely heavily on one another to survive. Second, we have international bodies like the WTO and IMF to regulate and potentially curb the escalation of trade wars. Third, central banks and governments around the world have learned from past mistakes and are likely to handle economic crises with greater caution.

Interestingly, Australia’s housing market remained relatively stable during the Great Depression. According to Matusik, Australian property prices only saw mild fluctuations during that period and quickly rebounded. Unlike the U.S., Australia didn’t experience a housing crash thanks to its robust banking system and timely government intervention. Strict immigration policies kept population growth stable, while large infrastructure projects created jobs and supported the economy.

source:matusik

This historical lesson shows that even in times of global recession, Australian real estate can remain a relatively safe investment. Of course, history doesn't repeat itself exactly—but it provides valuable insights for today’s policymakers and investors alike.

8. The Dawn of a New Era

Renowned economist Tao Dong describes Trump’s tariff war as “the end of an era.” He believes the golden age of globalisation is over. We are now witnessing a shift toward deglobalisation, where trade relationships between countries are being redefined, and supply chains are becoming increasingly regional or local. This trade conflict could mark a major overhaul of the global trade system.

For Australia, this presents a complex dilemma. On one hand, it shares deep historical ties with the U.S.; on the other, China remains its largest trading partner. Australia must now tread a very fine line between these two global powers.

The tariff war is only the beginning. The global economic landscape is already being reshaped. The combination of a weaker Australian dollar, RBA rate cuts, and rising construction costs could all contribute to a continued rise in the property market. For well-prepared investors, this may indeed be a rare opportunity hidden within the crisis.

History has shown that Australia’s property market demonstrates remarkable resilience during global turbulence. While we may not see a repeat of the 1930s Depression, we are undoubtedly standing at a major turning point in history. As Tao Dong puts it: the end of one era marks the beginning of another.

Final Thoughts

So let me ask you this: Are you ready for this new era? Is your investment portfolio equipped to navigate the restructuring of the global economy?

Alison’s Story

Born in Hong Kong an moved to Australia, I have been associated with real estate all my life. As the plane slowly landed on the runway of Melbourne Airport, my life and career also changed to another runway. I changed from a Hong Kong real estate agent to an Australian real estate agent, and successfully obtained the Australian lawyer qualification.

When I was working in a law firm, I was surrounded by highly educated professionals. Even though their wages are very well, and they are absolutely the elites in society, but their lives are full of hard labor, and it’s hard for them to get rich through buying properties.

So I spend all my time and effort on learning financial and real estate investment knowledge, hoping to achieve financial freedom as soon as possible, and let my parents who have worked hard for many years live a good life.

Now I will share with you the knowledge and experience of investing in Australian real estate, and embark on the road to financial freedom together.

Alison Australian real estate information platform

The original intention of Miss Alison to establish investwithalison.com is to provide neutral Australian real estate information through this platform and help investors establish the most suitable investment strategy.

👉Website: investwithalison.com

👉Email: hello@investwithalison.com

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