The benchmark S&P/ASX200 index swung slightly into the red in the final minutes of trade on Tuesday, finishing down 5.4 points, or 0.06 per cent, to 8,374.
The broader All Ordinaries stayed slightly in the green, gaining 5.0 points, or 0.06 per cent, to 8,633.4.
The ASX200 index had been up as much as 0.8 per cent in early trading - clawing back some of Monday's sharp losses of 1.8 per cent - after Mexico and Canada won a 30-day reprieve from the US president's tariffs.
But the gains evaporated after Mr Trump's levies went into effect with China at a minute past midnight Washington time, or 4.01 pm AEDT.
Soon after, Beijing hit back, slapping counter-tariffs on US coal and LNG imports as well as crude oil, agricultural machinery and large-displacement cars.
"The US's unilateral tariff increase seriously violates the rules of the World Trade Organization," China's Ministry of Commerce said.
"It is not only unhelpful in solving its own problems, but also damages normal economic and trade cooperation between China and the US."
Pepperstone head of research Chris Weston said it had been a wild day in markets with big intraday reversals playing out in equities, currency and cryptocurrency.
The Australian dollar, which on Monday hit a nearly five-year low of 60.88 US cents, had rebounded against its US counterpart but then dropped again as the China tariffs took effect.
About 5pm the Aussie was buying 61.88 US cents, from 61.27 US cents at the same time on Monday.
Bitcoin fell from $US102,000 back below $US100,000, having fallen as low as $US92,000 on Monday.
Eight of the ASX's 11 sectors finished lower, with materials/mining and tech higher and health care flat.
Property was the biggest loser, dropping 1.1 per cent as Goodman Group fell 1.2 per cent and Stockland retreated 1.6 per cent.
Tech was the biggest gainer, rising 1.5 per cent as Appen climbed 9.7 per cent, Technology One advanced 1.9 per cent and Wisetech Global climbed 3.6 per cent.
In health care, Pro Medicus climbed 5.2 per cent to an all-time high of $283.92 as the health imaging company announced another US contract signing, a $53 million, seven-year contract with a Florida health care chain.
In the heavyweight mining sector, Fortescue rose 1.8 per cent to $18.62, BHP added 0.7 per cent to $39.53 and Rio Tinto advanced 1.6 per cent to $116.76.
Goldminers were higher after the precious metal overnight hit an all-time high of $US2,830 an ounce, with Northern Star adding 1.5 per cent, Evolution climbing 1.6 per cent and Vault Minerals advancing 5.2 per cent.
All of the big four banks finished lower, with CBA and NAB both dipping 0.3 per cent, to $157.70 and $39.12, and Westpac and ANZ both slipping 0.2 per cent, to $33.11 and $30.13.
ON THE ASX:
* The benchmark S&P/ASX200 index on Tuesday dropped 5.4 points, or 0.06 per cent, to 8,,374
* The broader All Ordinaries gained 5.0 points, or 0.06 per cent, at 8,633.4
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 61.88 US cents, from 61.27 at the close of business Monday
* 96.08 Japanese yen, from 95.25 yen
* 60.11 euro cents, from 59.80 euro cents
* 49.92 British pence, from 49.87 pence
* 110.66 NZ cents, from 110.53 NZ cents
