China and the European Union have announced new trade barriers on US goods in response to steep duties imposed by US President Donald Trump, escalating a global trade war that has hammered markets and raised the likelihood of recession.

China announced a tariff hike on US imports to 84 per cent from 34 per cent on Wednesday, shortly after Trump’s punitive 104 per cent tariffs on Chinese imports kicked in, as a standoff between the world’s two largest economies showed no signs of resolution.

The EU said it would impose 25 per cent tariffs on a range of US imports in a first round of countermeasures. The 27-member bloc faces US tariffs of 20 per cent on most products and higher duties on autos and steel. ountermeasures in Canada, a close US ally and major trading partner, also took effect on Wednesday.

Targeted US duties on dozens of other countries, from Japan to Madagascar, also took effect, the latest in a thicket of tariffs that are unwinding a global trading order that has been in place for decades. Tariffs in the world’s largest consumer market now average above 20 per cent, according to various estimates, up from 2.5 per cent before Trump took office.

JPMorgan Chase CEO Jamie Dimon, a prominent voice on economic matters, said Trump’s tariffs would probably lead to a recession and defaults by borrowers.

Global markets took a pummeling, with the damage spreading beyond stock markets that have seen trillions of dollars in equity evaporate over the past week. Oil prices plunged to four-year lows, while investors dumped US Treasury bonds and the dollar, which are typically seen as safe havens.

Japan and Canada said they would cooperate to stabilise the global financial system – a task usually taken on by the United States during times of crisis.

Trump has shrugged off the market rout and offered investors mixed signals about whether the tariffs will remain in the long term, describing them as “permanent” but also boasting that they are pressuring other leaders to ask for negotiations.

“BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!” he wrote on social media.

Trump has said the tariffs will help rebuild an industrial base that has withered over decades of trade liberalisation, though he says he is open to negotiating down those barriers with trading partners on a country-by-country basis. US officials, however, say they will not prioritise talks with China.

“The US escalation of tariffs on China is a mistake on top of a mistake, which seriously infringes on China’s legitimate rights and interests and seriously undermines the rules-based multilateral trading system,” China’s finance ministry said in a statement.

Beijing also imposed restrictions on 18 US companies, mostly in defence-related industries, adding to the 60 or so American firms already punished over Trump’s tariffs.

The White House had no immediate comment on China’s latest retaliatory move. Earlier on Wednesday, China called its trade surplus with the United States an inevitability and warned it had the “determination and means” to continue the fight if Trump kept hitting Chinese goods. 

China’s currency has faced heavy downward pressure, with the offshore yuan at record lows due to the tariffs. But sources told Reuters the central bank has asked major state-owned banks to reduce US dollar purchases and would not allow sharp yuan declines.

US stock indexes were mixed at the open on Wednesday. Since Trump unveiled his tariffs on April 2, the S&P 500 has suffered its deepest loss since the benchmark’s creation in the 1950s.

Global drugmakers’ stocks dropped across the board on Wednesday after Trump reiterated plans for a “major” tariff on pharmaceutical imports on top of existing duties.

Economists say Trump’s tariffs could increase costs for the average US household by several thousands of dollars annually, which could become a political liability for a president who campaigned on lowering the cost of living. Three out of four Americans expect prices to increase due to Trump’s tariffs, according to a Reuters/Ipsos poll.

Opposition Democrats, locked out of power in Washington, have struggled to form a coherent response. Some have blasted the tariffs as counterproductive, but others have said that Trump is simply going too far.

Australia is looking to bolster free trade with the rest of the world in the wake of Donald Trump’s tariffs, as the government moves to reassure investors the nation is well-placed to avoid a recession.

Prime Minister Anthony Albanese talked up his government’s diplomatic victories as he positioned Labor as best-equipped to increase trade links with China, India and south-east Asian neighbours.

“There are enormous opportunities for Australia to take advantage of where we are in the world,” he told reporters on Wednesday.

“In ASEAN, building on the work that we’ve done, building up trade relationships … continuing to build on our economic relationship with China, a relationship that we have repaired since we’ve been in government.”

The comments were a veiled dig at the coalition, who were in government when China slapped sanctions on a swathe of Australian exports, hobbling industries such as barley, wine and seafood.

Australia is also looking to strengthen trade ties with the European Union to make up for lower demand.

Trade Minister Don Farrell was set to meet with EU counterpart Maros Sefcovic on Wednesday night to resume free trade agreement negotiations. Talks broke down in late-2023 due to disagreements over market access for agricultural products.

“Australia’s position has been clear – we want a new trade agreement with the EU, but only one that gives Australia new, commercially meaningful market access, in particular for Australian agriculture,” Senator Farrell said.

One thing that won’t be up for negotiation in trade talks is the Pharmaceutical Benefits Scheme, which US pharmaceutical companies have singled out as “unfair”. 

Mr Trump on Wednesday promised “major” tariffs on pharmaceuticals after they were earlier exempted.

Pharmaceuticals are one of Australia’s largest export groups to the US, with ASX-listed CSL accounting for the majority of the $1.6 billion in shipments in 2024.

“I make this point unequivocally,” said Mr Albanese.

“Australia will stand up for our Pharmaceutical Benefits Scheme. Our PBS is an essential part of who we are. We will never negotiate on it. We will never undermine it.”

Mr Albanese’s comments came as Treasurer Jim Chalmers conferred with the heads of regulators ASIC, APRA and the ACCC, and the Reserve Bank and Treasury in a snap meeting.

“Today is a really good opportunity for us to confer with, compare notes with, and coordinate our efforts with the regulators and others involved in the market right now,” Dr Chalmers said.

“There is a lot of economic uncertainty right around the world, but Australia is better placed and better prepared than most to deal with it.”

Dr Chalmers, who will meet with members of the Business Council of Australia on Thursday, hit out at Opposition Leader Peter Dutton for suggesting Labor would lead Australia into a recession if re-elected.

Treasury has predicted Australia to avoid a recession and for GDP growth to accelerate next year, despite the tariff impact.

But IG markets analyst Tony Sycamore said the Australian economy was on track for a seismic hit as US country-specific tariffs, including a 104 per cent impost on China, took effect.

“At the risk of sounding dramatic, we are on the verge of seeing the two largest economic and military superpowers collide at high speed, with Australia caught squarely in the middle,” he said.

“If current lines hold, the fallout has the potential to dwarf the economic impact on the Australian economy felt during the GFC and COVID.”

Dr Chalmers conducted his meeting blitz as he prepared for an election debate against his coalition counterpart Angus Taylor on Wednesday night.

Speaking outside the Council of Financial Regulators meeting, the treasurer said he wouldn’t underestimate his opponent.

“I take Angus more seriously than his own colleagues do. Frankly, I think it’s unedifying the way that they line up to bag him in the paper,” Dr Chalmers said, referencing recent leaks to media organisations by coalition sources critical of Mr Taylor. 

Pakistan’s national carrier has posted an annual profit for the first time in more than two decades ahead of a second attempt by the government to sell the airline.

The disclosure was made at a Pakistan International Airlines (PIA) board meeting, the country’s defence minister said.

“PIACL Board today has approved its accounts FY 2024, and after 21 years, it has achieved an operating profit of PKR 9.3 Billion ($A55.58 million) & Net Profit of PKR 26.2 Billion (after deferred tax adjustment),” Defence and Aviation Minister Khawaja Muhammad Asif said in a post on X, which was confirmed by the airline.

Prime Minister Shehbaz Sharif termed it a “major turnaround after decades of losses” and said in a post on X: “The skies ahead looks brighter, God willing.”

Islamabad’s attempt to privatise PIA last year fell flat when it received only a single offer, well below the asking price of more than $US300 million.

Pakistan had offloaded nearly 80 per cent of the airline’s legacy debt and shifted it to government books ahead of the privatisation attempt.

The rest of the debt was also cleaned out of the airline’s accounts after the failed sale attempt to make it more attractive to potential buyers, according to the country’s privatisation ministry.

The airline has for years survived on government bailouts as its operational earnings were eaten up by debt servicing costs.

Officials say offloading the debt burden and recent reforms like shedding staff, exiting unprofitable routes and other cost-cutting measures led to the profitable year.

The nation’s highest court has kept the door open for environmental groups to prosecute law-breaking loggers when regulators won’t, dealing another blow to the native timber industry.

The High Court decision on Wednesday was welcomed as a “huge win” in the battle to protect glider habitats.

It confirmed private people or entities can enforce state forestry laws, rather than state government regulators only.

“This is especially important at a time when governments are trying to limit the ability of groups to take such action,” WWF Australia land clearing senior manager Stuart Blanch said.

Environmental law expert and state Greens MP Sue Higginson said the decision ended a dark era of communities being denied access to justice on behalf of native forests.

“This is a huge win … no longer will internal government deals protect the Forestry Corporation from being prosecuted for their illegal actions,” she said.

The group behind the case, South East Forest Rescue, said the High Court challenge was an attempt by the state’s forestry industry manager to avoid answering damning evidence of illegal activities in native timber forests.

“Rather than engaging with the substance of our claims, Forestry Corporation has fought to deny our right to bring them to court,” South East Forest Rescue spokesman Scott Daines said.

The group’s case sought to minimise the effects of logging on three forest-dependent marsupials in southeast Australia: the southern greater glider, yellow-bellied glider and squirrel glider.

The southern greater glider, about the size of a house cat, is listed as endangered while the other two are considered endangered or vulnerable.

Forestry Corporation argued third parties had no standing to bring civil enforcement proceedings.

But the High Court found people whose private interests were affected or who had a special interest, such as long-standing concern about logging and its effect on certain species, could bring prosecutions.

A Forestry Corporation spokeswoman told AAP the corporation was reviewing the judgment.

The case will return to the Land and Environment Court later this year.

South East Forest Rescue is seeking orders to restrain Forestry from logging in NSW north and south coast state forests unless proper surveys for greater gliders, yellow-bellied gliders and squirrel gliders are completed.

It also wants appropriate protections around den trees.

An Australian Forest Products Association spokesman said the group was trying to bully the industry out of existence.

The native logging industry has haemorrhaged money in NSW from environmental court battles and loss-making native timber operations.

It also faces large swathes of forest being protected in a proposed Great Koala National Park to be established in the next two years.

Victoria ended native forest logging in 2024, as did Western Australia, the home of sought-after karri, jarrah and wandoo woods.

The WA government said the closure reflected the changing climate and community attitudes about an “unsustainable” part of the industry.

But Tasmania plans to capitalise on mainland jitters, pledging to let loggers into up to 40,000 hectares of native forest previously set aside as a “wood bank”.

Greens leader Adam Bandt says he would be astounded if Labor refused to “respect” the choice of voters by shunning his party in a hung parliament.

The minor party has unveiled a plan to protect existing mum-and-dad investors by grandfathering negative gearing and capital gains tax for people with one investment property.

Negative gearing allows investors to claim deductions on losses and the capital gains tax discount halves the tax paid by Australians who sell assets owned for 12 months or more.

In an address to the National Press Club on Wednesday, the Greens leader said the proposal would be used as a bargaining chip should Labor want his party’s support to form government after the May 3 election.

Prime Minister Anthony Albanese has repeatedly insisted there will be “no deals” with the Greens in the event of a hung parliament.

But Mr Bandt said the penny was dropping for the major parties, with polls indicating both will struggle to reach the necessary 76 seats to form a majority government.

“I would be astounded if the prime minister, or anyone else, refused to respect the parliament that the Australian people choose,” he said.

“If he can convince 51 per cent of the population to vote for him then OK, but that’s not what happened. That’s not what he did last time.

“With more people saying they want more voices at the table as part of a strong crossbench, he’s going to have to learn to play well with others.”

Labor election campaign spokesman Jason Clare ruled out potential tax changes.

“No, flat-out no,” he told Sky News on Wednesday.

“What we want to do is build more homes.”

Former Labor leader Bill Shorten went to the 2019 election promising to curb negative gearing, before losing.

The Greens have said they would not help the coalition to form government.

Mr Bandt said Australia needed to renegotiate the ANZUS Treaty, a security agreement signed after the end of World War II.

“We’ve got Peter Dutton, who wants to bring Trump-style politics to Australia, and Anthony Albanese … going out and inviting Trump to come to Australia,” he said.

“As if sucking up to these bullies is going to change the way they do things.”

The Greens, who have four lower house MPs, are also pushing for a freeze on rents and adding dental treatment for adults to Medicare.

Another $48 billion in value has been wiped from the All Ordinaries top 500 as equities continue to buckle under an erratic and escalating trade war.

As markets closed the S&P/ASX200 had fallen 145.9 points, or 1.94 per cent, to 7,364.1, as the broader All Ordinaries lost 154.2 points, or two per cent of its $2.6 trillion market cap, to 7,550.2 points.

More than $170 billion in value has been wiped from the top 500 stocks since US President Donald Trump announced his “Liberation Day” tariffs on April 2. 

So-called “Liberation Day” tariffs took effect at 2pm AEST, punctuated by the US imposing a 104 per cent total tariff on goods from China, in response to its 34 per cent retaliatory tariff on the US.

Ten of 11 local sectors were in the red as markets closed, led by a four per cent slide in energy stocks as oil prices tanked on shrinking crude demand expectations.

The Australian dollar has been unable to reclaim the 60 US cent level and was buying 59.74 US cents at 4pm.

A helicopter operator failed to manage safety risks before a fatal mid-air collision, investigators have found, opening the door to compensation claims.

Four people were killed and nine injured when two Sea World helicopters collided above the Gold Coast Broadwater in January 2023, during the peak of the busy summer holiday season.

A final report by the Australian Transport Safety Bureau was handed down on Wednesday, detailing the litany of failures that led to the crash.

Limitations in visibility from both helicopters, failed radio transmissions and competing priorities when looking at boats and other aircraft led to the mid-air crash, the report found.

The two-year investigation showed issues at Sea World Helicopters ultimately leading to the fatal crash began years earlier when the ownership changed and safety protocols deteriorated.

Nine months before the crash, the helipad locations changed, increasing the risk of a collision point.

New helicopters were introduced a week before the crash and were not fitted with company radio communications and no real-time maps of other helicopters.

These changes and others to the company’s operations undermined risk controls, the safety bureau’s commissioner Angus Mitchell said.

Days before the crash, one of the helicopter’s radios stopped broadcasting transmissions due to a fault with the antenna, an issue not known to the pilots.

On the fateful day, an inbound radio call from one of the helicopters failed to register to the second chopper boarding people on the helipad.

The first helicopter waited for a taxi call from the second helicopter to separate to avoid a mid-air collision but it never came.

The departing pilot made the taxi call but it was not broadcast due to the fault, the report said.

The lack of technology to identify other helicopters and the radio failures meant pilots relied entirely on a see-and-avoid strategy, but with poor visibility it led to the crash.

“Commercial aviation must have multiple safety defences in place,” Mr Mitchell told reporters. 

“It should never be vulnerable to single-point failures such as a faulty radio or pilot’s ability to visually detect another aircraft in the sky.”

The bureau also found evidence that passengers on both of the helicopters were incorrectly restrained but couldn’t determine the level of contribution to their injuries.

The crash was entirely preventable, Mr Mitchell said.

“All of those failings led to a catastrophic outcome,” he said.

“In terms of how bad they were in themselves, each individual failing was only one part. 

“You need to put all of them together for this outcome to have occurred, and the outcome couldn’t have been worse.”

Sea World Helicopters had rectified a number of the issues identified in the report but there was still work to be done to improve processes, Mr Mitchell said.

Four of the recommendations made are yet to be implemented by Sea World.

Pilot Ashley Jenkinson, 40, British couple Ron and Diane Hughes, 65 and 57, and Sydney mother Vanessa Tadros, 36, died in the crash.

Ms Tadros’ son Nicholas, 10, underwent serious surgeries following the crash while Victorian mum Winnie de Silva, 33, and her nine-year-old son Leon were hospitalised.

The pilot of the second chopper, Michael James, managed to land his aircraft safely, but he and two of his passengers were injured by flying glass when its windshield shattered.

The findings will feed into compensation claims lodged by Shine Lawyers in the Brisbane Supreme Court on behalf of victims inside the helicopters and those traumatised.

The claims, up to $925,000 per person, are for the pain and suffering caused by the crash, litigation specialist Roger Singh said.

Australia can capitalise on “enormous opportunities” in the wake of Donald Trump’s tariffs, Prime Minister Anthony Albanese says as the US president escalates his trade feud with China.

The government hopes to reassure investors and the business community that Australia is well-placed to avoid a recession, as the rest of the world faces far more dire economic consequences.

Mr Albanese talked up his government’s diplomatic victories as he positioned Labor as best-suited to make the most of Australia’s opportune geographical position and increase trade links with Asian neighbours.

“There are enormous opportunities for Australia to take advantage of where we are in the world,” he told reporters on Wednesday.

“In ASEAN, building on the work that we’ve done, building up trade relationships through Nicholas Moore’s report about Southeast Asia, building our relationship with India, continuing to build on our economic relationship with China, a relationship that we have repaired since we’ve been in government.”

The comments are a dig at the coalition, who were in government when China slapped sanctions on a swathe of Australian exporters, hobbling industries such as barley, wine and seafood.

Australia also looks to build trade ties with the European Union to make up for lower export demand.

Trade Minister Don Farrell is set to meet with EU counterpart Maros Sefcovic on Wednesday night to resume free trade agreement negotiations. Talks broke down in late 2023 due to disagreements over market access for agricultural products.

Mr Albanese’s reassurance comes alongside Treasurer Jim Chalmers calling meetings with the nation’s economic and financial regulators ASIC, APRA and the ACCC, and the heads of the Reserve Bank.

Those talks follow meetings with business leaders as the government ensures everything possible is being done to safeguard Australians from global volatility, Dr Chalmers said.

“These escalating trade tensions are casting a dark shadow over the global economy but Australia’s robust economy and budget puts us in good stead,” he said.

He hit out at Opposition Leader Peter Dutton for suggesting Labor would lead Australia into a recession if re-elected.

Treasury and several economists, such as ANZ’s Adelaide Timbrell and former RBA board member Warwick McKibbin, are not predicting Australia to enter a recession.

But IG markets analyst Tony Sycamore said the Australian economy was on track for a seismic hit as US country-specific tariffs, including a 104 per cent impost on China, were about to take effect.

“At the risk of sounding dramatic, we are on the verge of seeing the two largest economic and military superpowers collide at high speed, with Australia caught squarely in the middle,” he said.

“If current lines hold, the fallout has the potential to dwarf the economic impact on the Australian economy felt during the GFC and COVID.”

Dr Chalmers conducted his meeting blitz as he prepared for an election debate against his coalition counterpart Angus Taylor on Wednesday night.

The coalition has traditionally banked on its reputation as superior economic managers but recent polling suggests voters are no longer convinced.

A survey by pollster Redbridge found 31 per cent of respondents thought Labor’s economic vision was better for the nation, compared with 29 per cent who thought the coalition had a superior plan.

Mr Dutton attacked Labor for weakening Australia’s economic position, undermining the nation’s ability to respond in a crisis.

“Only a coalition government can deal with the economic headwinds, the uncertainty, the prospect of a global recession,” he told reporters.

“Labor has demonstrated all they do is tax and spend.”

Prime Minister Anthony Albanese said his government had turned a deficit in the last year of the previous coalition government into two surpluses, although the budget has since returned to a structural deficit position.

Peter Dutton has laid the ground for a showdown with gas giants over plans to set aside the energy resource for Australian firms and households.

The coalition unveiled long-awaited modelling for its domestic gas reserve policy, forecasting a modest seven per cent reduction in gas bills and three per cent for electricity.

Gas companies would face a levy if they did not set aside the resource for domestic use, prompting anger from the sector.

“Are we here to line the pockets of big gas companies? No, I’m here to support consumers,” Mr Dutton told reporters in Sydney on Wednesday.

“I want to bring the price of gas, electricity down and the cost of groceries down and the cost of construction.”

Industrial customers are being promised a 15 per cent reduction in gas bills and a forecast eight per cent decrease in wholesale electricity prices.

Households were the priority for the plan and lower energy prices would lead to cost-of-living relief throughout the economy from the end of the year, Mr Dutton said.

“We can see an impact very quickly, and I think we can see an impact not just for households, but for industrial users, for commercial users, and right across the economy,” he said.

“It depends on when people are contracted and what their individual arrangements are, but across the economy, we’ll reduce the cost of gas and we start negotiations with the companies from day one.”

Prime Minister Anthony Albanese dismissed the modelling while campaigning in Sydney, arguing the government had already worked to bring down the price of gas.

“The gas policy the coalition has is gaslighting the Australian public,” he said.

“Gas prices were $30 when we came to office. They’re now $13 to $14.

“These people think that the Australian people are like goldfish, that they don’t remember.”

The policy on energy comes after the coalition had repeatedly attacked the government on Labor’s previous modelling that showed households would save $275 on their power bills.

But the forecasts were made before a spike in energy prices stemming from Russia’s invasion of Ukraine in 2022.

The coalition’s gas plan would also be dependent on legislation to set up the domestic reserve passing parliament if the opposition wins government on May 3.

Australian Energy Producers chief executive Samantha McCulloch said the modelling left unanswered questions.

“The policy would introduce price controls in the east coast gas market and would be yet another heavy-handed intervention that will drive away investment and risk exacerbating the supply pressures in the longer term,” she said.

“Rather than increasing gas supply, the coalition’s policy risks reducing domestic gas production.”

Australia Institute executive director Richard Denniss welcomed the plan to impose levies on gas companies that prioritised exports rather than setting aside the resource for domestic use.

“Peter Dutton is rightfully arguing Australia has an abundance of gas and that all we need to do is to tax gas exports to ensure our gas flows first to Australian businesses and households,” he said.

“This is a big shift.”

The gas plan modelling was released on Tuesday night during the first leaders’ debate of the election.

A group of 100 undecided voters gave the win to Mr Albanese but one in five couldn’t decide which leader they preferred following the debate.

Visit AAP FactCheck’s website to read our assessment of claims made in the election campaign and debate.

The prime minister is hoping for good luck and prosperity as the cost of living continues to weigh on voters.

Vibrant lion dancers and a vigorous drumbeat welcomed Anthony Albanese to the heart of Chinatown as part of the unveiling of a refurbished Sydney food market.

“The dancing, the culture, the language of all around the world – this will be a centre of it,” he told reporters on Wednesday.

“This is about job creation, it’s about boosting our economy.”

The traditional Chinese performance is often used at business openings to bring fortune while warding off evil spirits.

And in a tight election contest dominated by living costs and concerns about the economic impact of US tariffs, Mr Albanese needs all the luck he can get.

The Australian stock market fell 1.98 per cent in early trade on Wednesday before paring losses by noon, with global markets on eggshells as the US and China continue trading tariff blows.

Mr Albanese said his government had continued to engage with the US administration for an exemption from new tariffs and his treasurer has called a snap meeting on the issue with banking, business and consumer watchdogs.

Fresh off his narrow debate victory on Tuesday, the prime minister and NSW Labor premier Chris Minns continued jabbing at the opposition leader, seizing on a recent policy U-turn over public servants working from home.

“How can we trust this bloke if his policies have got the life-span of warm yoghurt?” Mr Minns said.

“There’s a use-by date on everything he says.”

Mr Albanese also waved around a copy of the coalition’s notoriously austere 2014 budget to claim a government under Mr Dutton would echo its cuts, before asserting the previous Liberal government did not follow through on a promised “gas-led recovery”.

“These people think that the Australian public are like goldfish and that they don’t remember,” the prime minister said.

With just weeks until the May 3 poll, the election contest remains tight.

One in five audience members at the debate were undecided, reflecting a broader voter sentiment that is expected to deliver a hung parliament.

The possibility has led crossbenchers to try throw their weight around, such as Greens leader Adam Bandt who has called for a change on property tax breaks.

But Mr Albanese said Labor’s objective is to build on its seats and govern in its own right.

“Adam Bandt is trying to make himself relevant, and I don’t blame him for that,” the prime minister said.