Dr Stuart Rollo from the Centre for International Security Studies at the University of Sydney is an expert in international politics and US history. He said the US tariffs herald a significant change to the integration of the world economy and signal a shift in the global balance of power.

"The ‘Liberation Day’ tariffs have definitively ended American support for the integrated global economy that was built and championed by the US over the past eight decades," Dr Rollo said.

"Often framed as some combination of incompetence and Trump’s personal approach of brash bullying, the reality is a much harder pill to swallow. These tariffs are the purposeful, rational, actions of an empire facing the structural realities of its own relative decline and the rise of a superpower competitor, China.

"The Trump administration sees the American-led system of economic integration as benefitting China to a greater extent than America. By dismantling it now, they hope to damage China’s economy to a greater extent than their own, and to reindustrialise the US heartland in anticipation of a more intensive conflict with China in years ahead, when the military industrial base of each country will be critical in deciding the global balance of power."

Dr Vladimir Tyazhelnikov in the School of Economics researches international trade and global value chains. He said the disruption tariffs will cause to the operation of businesses will lead to an increase in costs for both firms and consumers around the world, while reducing investment.

"Over 60 percent of world trade consists of parts and components – which can be anything from raw materials to bolts and screws or screens, batteries, and car transmissions. Disrupting this trade will affect global supply chains, raise costs for firms, and lead to higher consumer prices," he said.

"The tariffs were introduced rapidly and without transparency, increasing uncertainty for both local and international businesses. This uncertainty is likely to reduce investment.

"The US tariffs violate World Trade Organisation (WTO) rules, and the inability for the WTO to respond raises concerns about the future of the global trading system and increases the risk of further trade disputes between other countries.

"The direct effect on the Australian economy is not strong and we may even benefit from lower prices of imported goods. However, a major risk for Australia is the potential slowdown in East and Southeast Asia, which are key destinations for Australian exports."

Dr Pramod Kumar Yada, a lecturer in finance at the University of Sydney Business School, said Australia's close economic relationship with markets in the US and China and the falling Australian dollar may add pressure to superannuation and employment, but to not panic yet.

"Superannuation balances are at risk due to large exposure to US markets and correlated falls in the ASX," he said.

"The falling Australian dollar may force funds to sell liquid assets to meet offshore obligations, adding pressure to markets. If prolonged, the crisis could hit consumer confidence and jobs, particularly via Australia’s exposure to China.

"Private equity may also feel the squeeze as liquidity stress prompts capital recalls and discounted asset sales. But retail investors should avoid panic, especially younger Australians — super is a long-term investment."

Dr Luke Hartigan in the School of Economics said that while the tariffs are expected to weaken economic growth in the US as consumers pull back spending and businesses shelve investment plans, Australia is well positioned to adjust.

"Increasing fears of a recession in the US and the potential for a global downturn has led some to suggest a recession is now possible in Australia," he said.

"While Australians are rightly worried, they should not be alarmed. The direct effect of the 'Liberation Day' tariffs on Australia is going to be relatively small.

"The bigger concern is how Australia's major trade partners — especially China — respond to newly imposed tariffs by the US.  If those economies go into recession, that could have an impact on us via our trade linkages.

"However, we are well placed to weather the coming global storm clouds. First, the Australian dollar is very flexible and it's likely to fall significantly. This will provide a cushion to the Australian economy. The falling dollar acts as a 'shock absorber' by supporting our incomes and making our exports relatively more competitive.

"Second, the RBA can cut interest rates. It has the flexibility to do that. Markets are expecting a cut next in May and potentially more cuts during the year which will provide support to consumers and businesses."

Hero photo: Andy Wong/AP/AAP.