On the back of Donald Trump’s latest – and frankly absurd – threats to hit China with 104% tariffs, the price of iron ore has tumbled sharply and is currently worth US$92.80/tonne in Singapore at 1.20pm this afternoon.

Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.

That’s officially a YTD low for what is the key economic pillar of Australia’s export economy.

The thinking goes that China, now dealing with the economic impacts of tariffs – both those imposed upon it by the U.S. and, those it imposed itself on the U.S. in retaliation – will take some steam out of China’s already struggling property and construction sectors, culminating in less demand for iron ore.

Iron ore, is, of course, the major lifeblood of the Australian economy.

It effectively commands the price of our currency, given the AUD is viewed in forex houses around the world as a bellwether of the Chinese economy.

As such, this decline stands far more likely to hurt Australians than anything Trump could do to Australia’s tariff wife, given our relatively small trading partnership with America (when, at least, compared to China).

The price of iron ore is going down with a basket of other hard commodities as investors try to make sense of current market chaos but arrive at the conclusion that in the short term, demand for commodities is likely to suffer as economies now enter mini (or not so mini) tariff-borne winters.

And it’s been bad news for several well-known names on the stock exchange, including the ASX’s second largest company, BHP (ASX:BHP).

Just take a look at the following well-known iron players. As of 1.20pm:

• The materials sector is down -3.07%
• BHP Group (BHP) is down -3% to $34.32/sh
• Rio Tinto (RIO) is down -4.1% to $104.96/sh
• Mineral Resources (MIN) is down -10.3% to $14.70/sh
• Fortescue Ltd (FMG) is down -4.5% to $14.15/sh

As for where the Aussie markets head from here, who knows?

The big question is for how long China and America can keep ratcheting up the tension. It does seem unlikely the U.S. would impose 104% tariffs on China for the next four years. (We discussed this more in the HotCopper podcast episode this week too.)

More market news

Levy beef: Trump whacks Oz with 10% tariffs on “Liberation Day”

Meet GeoGeorge: The HotCopper poster so accurate he got hired as an analyst

Especially considering that, as much as America wants to try and pretend otherwise, de-coupling from China completely without decimating what consumers can buy on the shelves at home is a complete fantasy.

Join the discussion: See what’s trending right now on HotCopper, Australia’s largest stock forum, and be part of the conversations that move the markets.

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.