Near noon on Monday the benchmark S&P/ASX200 index was on track for its worst loss in 22 months, dropping 167.7 points, or 1.97 per cent, to a 13-day low of 8,364.6.
The broader All Ordinaries was down 171.2 points, or 1.95 per cent, to 8,618.5.
The day was on track to surpass a 1.89 per cent decline on September 4 to constitute the ASX's worst session since a 2.3 per cent loss on March 10, 2023.
The Australian dollar meanwhile had dropped to its lowest level against its US counterpart since early in the COVID-19 pandemic, buying 61.16 US cents, from 62.25 US cents at Friday's ASX close.
The selloffs came after President Trump over the weekend imposed 25 per cent tariffs on Mexico and Canada, and 10 per cent on China.
"This will be the golden age of America!" Mr Trump posted on social media. "Will there be some pain? Yes, maybe (and maybe not!)"
RBC Capital Markets' London-based global head of FX strategy, Elsa Lignos, said that while some were saying that the tariffs wouldn't last more than a few weeks, she was among those who saw them as a "big shock that we weren't priced for."
"Up until now I also thought Trump's main goal was to extract a 'win' even if it was more iconic than substantive," Ms Lignos wrote.
"But the very short lag to implementation and the way he's gone about this makes me think he actually believes tariffs are going to be the new income tax."
Canada and Mexico had also responded with tariffs of their own, while China vowed to retaliate with its own unspecified counter-measures.
Every sector of the ASX was down by at least one per cent at midday.
Materials/mining was the biggest loser, down 2.1 per cent.
Fortescue had slid 4.7 per cent, BHP had dropped 1.8 per cent and Rio Tinto had retreated 2.9 per cent.
Fisher & Paykel Healthcare had dropped 7.1 per cent to a six-month low of $31.93 as the Kiwi respiratory device-maker said the tariffs would likely hurt its bottom line in 2025/26, given that 45 per cent of its sleep apnoea products are manufactured in Mexico.
All of the big four banks were lower, with NAB retreating 1.8 per cent, Westpac falling 1.4 per cent, CBA down 1.3 per cent and ANZ slipping 1.1 per cent.
Back in the mining sector, Westgold had slid 11.4 per cent as the goldminer trimmed its full-year production guidance, citing engineering issues at two of its mines.
