By Jacob Shteyman in Canberra

“If you want to cook a steak, you don’t need to burn the house down.”

As equity markets in Australia and around the world went into freefall on Monday, it was clear that US President Donald Trump was, in fact, burning down the house, says IG markets analyst Tony Sycamore.

That’s bad news for Australia’s economy and superannuation balances.

“I would describe it as being very much on a cliff edge,” Mr Sycamore told AAP.

“We’re looking over. There’s recession down there, there’s a liquidity crunch down there.”

Treasurer Jim Chalmers said Australia was uniquely placed to weather the economic storm.

Treasury modelling unveiled on Monday predicted Australia’s GDP to be 0.1 per cent lower and inflation to be 0.2 per cent higher in 2025 as a result of the tariffs.

Australia’s GDP would be permanently lower over the medium term, mainly as a result of indirect effects from reduced export demand from Asia, while the inflationary increase would only be temporary.

“What we’re seeing here is the impact of a series of bad decisions taken about tariffs,” Dr Chalmers said.

“And the whole world is trying to get their head around the impacts on their own economies and the global economy as well.”

More than $150 billion was wiped off Australian stocks in early trading after China’s retaliation to Mr Trump’s tariffs and no sign of any softening in the White House’s hawkish rhetoric drove fears of a US recession.

Prime Minister Anthony Albanese acknowledged it was a concerning time for Australians’ finances.

“We do live in uncertain times, and we are concerned about the impact on global trade and the global economy,” he told reporters.

“We’re seeing a considerable impact, negative impact on the stock market. That impacts Australians, because superannuation funds have their shares there.

“I’m concerned about the impact in Asia. If you look at the impact of some of the tariffs on Asia, some of them were quite high.”

Super funds are being heavily impacted by falls in US equities given their high allocations in the US stock market.

“If you log into your super fund at the moment – I’m too scared to look at mine – you’re going to be feeling a lot poorer as a result of the events over the past three or four weeks,” Mr Sycamore said.

But the impact the downturn will have on Australians’ incomes will depend on the stage they are at in their work life.

While retirees are reliant on superannuation payments for their income, they tend to have more conservative allocations with higher concentrations of bonds to equities, meaning their balances would be less impacted.

Someone in the 30 to 50 age bracket is likely to see their balance take a heavier hit, but past experience suggests it’s likely to recover by the time they enter their retirement phase.

“If you were sort of planning on spending the money in a few months, you’re probably starting to panic a little bit,” Mr Sycamore said.

“If you’ve got a few years ahead of you, like many Australians will have, you’re probably not so concerned.”

The agriculture, energy, mining and durable manufacturing sectors were expected to be more adversely affected than others, Treasury’s analysis found.

Opposition Leader Peter Dutton said the coalition had a proven track record of handling global economic shocks, such as September 11 and COVID-19.

“In uncertain times, our country needs strong economic management,” he posted on social media.

“In this campaign the choice is about who can better manage our economy to help you get ahead.”

Markets wipe $100b by lunchtime as recession fears grow