00:00The main US index, the S&P 500, fell 1.6 per cent on Friday and the Nasdaq 2.2 per cent.
00:09Sentiment wasn't helped by the fact that Donald Trump sacked the head of Labor Statistics
00:12because he didn't like the numbers she reported for July, but it was mainly his reveal of
00:16all the tariffs.
00:18Compared with the 10 per cent drop in two days after the first set of tariff announcements
00:22on April 2, that was nothing.
00:25It wasn't a shock this time, and the tariffs were less than four months ago.
00:29Nevertheless, the average level of US tariffs goes back to 1930, when the Smoot-Hawley
00:35Tariff Act turned the October 1929 stock market crash into the Great Depression.
00:41Mr Smoot and Mr Hawley, the two congressmen who sponsored that bill, thought it would lift
00:45US employment, but it did the opposite because other countries retaliated and US exports collapsed.
00:52The idea this time is partly to lift employment, but mainly to lift government revenue.
00:57And that's going brilliantly, 30 billion bucks a month so far.
01:01Now, President Trump says it's being paid by foreign countries, but he's kidding.
01:05It's a tax paid by American consumers.
01:08And there's a lag as shops work through their untariffed stock.
01:13The orange line is the level of import tax that Trump has announced, which is an average
01:17of 17.5 per cent.
01:19The blue line is what it actually is now, which is about half that so far, 8.8 per cent.
01:26The local market benefited from solid gains by retailers as well as mining stocks.
01:30The gold price jumped 2 per cent, but oil fell only 3 per cent as storm clouds gather over
01:36the US economy as the result of the tariffs.
01:40And the Aussie dollar went up because the US dollar went down.
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