Australian shares have plummeted more than two per cent in early trading, with deeper drops expected in Asian markets after US tariffs blew expectations out of the water.

The S&P/ASX200 was down 143.3 points, or 1.83 per cent, just after 11am AEDT on Thursday to 7,791.2, as the broader All Ordinaries gave up 146, or 1.80 per cent, to 7,987.1.

Markets had expected US president Donald Trump’s “Liberation Day” tariffs to have a ceiling of 15 per cent, but instead Mr Trump announced a base rate of 10 per cent, and imposts including 34 per cent for China, 24 per cent for Japan and 20 per cent for the European Union.

Australian exports to the US will be taxed at 10 per cent, but heavier tariffs in the Asian region will have flow-on effects for the national economy.

“The tariff rates unveiled this morning far exceed baseline expectations, and if they aren’t negotiated down promptly, expectations for a recession in the US will rise dramatically,” IG Markets analyst Tony Sycamore said.

“My guess is we will very shortly see Goldman Sachs revise higher their 12-month estimate of a recession in the US from 35 per cent to 50 per cent.”

Ten of 11 local sectors were trading lower, with only consumer staples eking a 0.1 per cent gain.

Energy stocks were leading losses and down 2.5 per cent and oil prices tanked more than 3.5 per cent after the tariff announcement crushed crude demand expectations.

Financials were also taking a battering, down 2.2 per cent, with CBA down 1.5 per cent, and the remaining three big banks all down more than 2.4 per cent.

Investment and financial services giant Macquarie had plummeted 4.2 per cent to $188.70 by 11am AEDT.

Materials were down 1.4 per cent, but iron ore giants were suffering under what the tariffs could mean for China’s growth and resultant demand for the steel ingredient, with BHP, Rio Tinto and Fortescue all down more than 2.3 per cent.

IT stocks bled 2.6 per cent lower, tracking with a more than four per cent bloodbath on Wall Street’s tech-heavy Nasdaq index.

The Australian dollar is trading lower against the greenback, buying 62.62 US cents, down from 62.94 on Wednesday at 5pm, but recovering from a dip to 62.63 earlier on Thursday morning.

US President Donald Trump announced a 10 per cent baseline tariff on all imports, and higher duties on dozens of other nations, deepening the trade war he kicked off on his return to the White House.

The sweeping duties would erect new barriers around the world’s largest consumer economy, reversing decades of trade liberalisation that have shaped the global order. 

Trading partners are expected to respond with countermeasures of their own that could lead to dramatically higher prices for everything from bicycles to wine.

US stock futures sank after the announcement, following weeks of volatile trading as investors speculated about how the incoming tariffs might affect the global economy, inflation and corporate earnings. 

US stocks have erased nearly $US5 ($A8) trillion of value since February.

“It’s our declaration of independence,” Trump said at an event in the White House Rose Garden.

The president used aggressive rhetoric to describe a global trade system that the United States helped to build after World War II, saying “our country has been looted, pillaged, raped and plundered” by other nations.

Chinese imports will be hit with a 34 per cent tariff, according to Trump, on top of the 20 per cent levy that he previously imposed on that country. 

Close US allies were not spared, including the European Union, which faces a 20 per cent tariff.

A White House official, speaking on condition of anonymity, said the higher penalties will take effect on April 9 and will apply to about 60 countries in all. 

The baseline 10 per cent tariff will take effect on Saturday (US time), the official said.

The “reciprocal” tariffs, Trump said, were a response to duties and other non-tariff barriers put on US goods.

“In many cases, the friend is worse than the foe in terms of trade,” Trump said.

Canada and Mexico, the two largest US trading partners, already face 25 per cent tariffs on many goods and will not face additional levies from Wednesday’s announcement.

The reciprocal tariffs do not apply to certain goods, including copper, pharmaceuticals, semiconductors, lumber, gold, energy and “certain minerals that are not available in the United States”, according to a White House fact sheet.

Following his remarks, Trump signed an order to close a trade loophole used to ship low-value packages – those valued at $US800 ($A1300) or less – duty-free from China, known as “de minimis”. 

The order covers goods from China and Hong Kong and will take effect on May 2, according to the White House.

Chinese chemical makers are the top suppliers of raw materials purchased by Mexico’s cartels to produce the deadly drug, US anti-narcotics officials say. 

Trump is also planning other tariffs targeting semiconductors, pharmaceuticals, and potentially critical minerals, the official said.

Trump’s barrage of penalties has rattled financial markets and businesses that have relied on trading arrangements that have been in place since the middle of last century.

Earlier in the day, the administration said a separate set of tariffs on auto imports that Trump announced last week will take effect starting on Thursday, US time.

Trump has already imposed 20 per cent duties on all imports from China and 25 per cent duties on steel and aluminium and extended them to nearly $US150 billion ($A240 billion) worth of downstream products.

His advisers say the tariffs will return strategically vital manufacturing capabilities to the United States.

Outside economists have warned tariffs could slow the global economy, raise the risk of recession, and increase living costs for the average US family by thousands of dollars. 

With AP

Australia will bolster its industries and take its export business elsewhere, as the prime minister slammed a new round of blanket US tariffs as “totally unwarranted”.

President Donald Trump singled out Australian beef in a long list of complaints about America’s trading partners, ahead of announcing 10 per cent tariffs on all Australian goods sent to the US.

This and other global levies will take effect from midnight US time (later Thursday AEDT) after he laid out his “Liberation Day” plan at the White House.

While the tariffs on Australian goods weren’t unexpected, Prime Minister Anthony Albanese said they were “totally unwarranted”.

“The administration’s tariffs have no basis in logic and they go against the basis of our two nations’ partnership,” he told reporters in Melbourne.

“This is not the act of a friend.”

The US tariffs vary depending on country and while most were around 25 per cent, Australia’s rate is on the 10 per cent baseline.

“No one has got a better deal … that doesn’t mean it’s a good thing,” Mr Albanese said.

Mr Trump has also slapped 10 per cent tariffs on the Heard and McDonald Islands, a barren and uninhabited Australian external territory in the Indian Ocean.

But Norfolk Island, another Australian territory in the Pacific Ocean, has been slugged with a 29 per cent tariff.

While Australia has ruled out reciprocal tariffs, Mr Albanese also gave assurances it won’t just bend to the US.

Neither will the government Americanise its health system, undermine its media bargaining code or weaken its biosecurity measures – which impose trade barriers on US beef and other American produce to prevent disease or contamination.

Instead, Australia will strengthen its anti-dumping regime to protect domestic steel, aluminium and manufacturing to combat unfair competition.

Labor will also provide $50 million to affected sectors, particularly bodies like the National Farmers’ Federation.

Australia has already earmarked $20 million for its “buy Australian” campaign, which encourages consumers to buy locally, and the government will prioritise local businesses for procurement and contracts.

Meanwhile, Australia’s trade relationships will be diversified. The government recently signed a new trade agreement with the United Arab Emirates and continues to pursue an agreement with the European Union.

Australia’s biggest exports to the US are financial services, gold, sheep and goat meat, transportation services and vaccines, as well as beef.

“Australians … they’re wonderful people, wonderful everything, but they ban American beef,” Mr Trump said at the White House.

“Yet we imported $US3 billion of Australian beef from them just last year alone. 

“They won’t take any of our beef, they don’t want it because they don’t want it to affect their farmers.”

Beef farmer Phillip Rattray had been anticipating higher returns on his products, but the decision made halfway across the world could change his fortunes.

Mr Rattray’s farm in northeast Tasmania is three times larger than the next beef producer, and he offloads about 4000 cattle to multinational beef processor JBS Swift every year to export overseas.

After stock shortages from Queensland flooding, he had been expecting a 50c/kg increase, equivalent to an extra $150 for a 300kg animal.

“We were looking at a bright future … as the (beef) prices going into America are very high at the moment but … these tariffs … will reduce the price,” Mr Rattray told AAP.

The farmer warns tariffs won’t just hurt Aussie farmers but also American consumers who purchase massive amounts of brining beef and smallgoods.

Australian Meat Industry Council chief executive Tim Ryan said Australian beef producers play a critical role in feeding American consumers.

Australia exports $3.3 billion of meat and $1.6 billion in pharmaceuticals to the US per year.

Donald Trump has inserted himself into the federal election campaign after slapping tariffs on 10 per cent on Australian exports to the United States.

The US president announced the sweeping round of tariffs as part of his so-called “Liberation Day” on Thursday morning, Australian time, including reciprocal duties on all countries.

A tariff of 10 per cent is the minimum the US will impose and is arguably a better outcome than Australia had expected given an outright exemption was looking very unlikely and many countries got hit far higher rates.

Prime Minister Anthony Albanese and Opposition Leader Peter Dutton are set to respond to the measures, which will come into effect in hours, on the campaign trail on Thursday.

Mr Albanese has previously flagged Australia could make a complaint to the global umpire, the World Trade Organisation.

It comes as Mr Albanese met with Australian golfing great Greg Norman, who is in the orbit of Mr Trump, on Wednesday night in Melbourne.

“We’re prepared for all possibilities going forward,” Mr Albanese told reporters on Wednesday.

The prime minister had previously said Australia would not compromise on its biosecurity arrangements or pharmaceutical deals in exchange for reduced tariffs.

Australian National University politics lecturer Jill Sheppard said tariffs offered pitfalls for both leaders on the campaign trail.

“It’s a zero-sum game,” Australian National University politics lecturer Jill Sheppard told AAP.

“Anytime the major parties talk about this, they risk getting other people offside.”

Mr Dutton, for example, could lean on the Liberal Party’s connections and broad political alignment with the US Republicans to claim he could get on the phone with the president.

“(However) any time Dutton talks about his relationship with Trump, it frames the Liberals as worryingly close to Trump,” Dr Sheppard said.

On the other hand, Labor could be blamed for failing to prevent the president’s first round of tariffs on all steel and aluminium imports.

The fact that no country has scored a US tariff exemption could play into the government’s favour, Dr Sheppard said.

Mr Dutton has argued he is a stronger leader than the prime minister and would be better placed to advocate for Australia’s national interest.

“I don’t care whether it’s President Trump or any other world leader, my job is to stand up for Australians, and I have the strength and the experience to be able to do that,” he said on Wednesday.

The opposition leader will campaign in Western Australia on Thursday while Mr Albanese will begin his day in Melbourne.