The S&P/ASX200 fell 130.4 points by midday on Monday, or 1.63 per cent, to 7,856.2, as the broader All Ordinaries lost 129.1 points, or 1.58 per cent, to 8,066.4.
The downturn follows a Friday slump on Wall Street after US President Donald Trump flagged an escalation of 'Liberation Day' tariffs due on April 2, and noted any carve out negotiations would not happen until after they were announced.
"These tariffs are aimed at offsetting not just tariffs on US exports, but also non-tariff trade barriers, exchange rate manipulation, or even domestic taxes such as value-added tax," ANZ economists said in a research note.Â
"Uncertainty is high, and the range of possible outcomes is wide."
Meanwhile, Barclays has cut its global growth outlook to 2.9 per cent, a sharp slowdown from last year's 3.3 per cent.
"We expect global (and US) growth to slow considerably from 2024 levels," Barclays head of rates and securitised products research Ajay Rajadhyaksha said.
"But if worst-case outcomes on tariffs are realised, even those forecasts may end up being too optimistic."
All 11 local sectors fell sharply in early trading on Monday, with materials and IT stocks both falling more than two per cent each.
Financials, which account for almost one-third of the local bourse by combined market cap, were down 1.4 per cent.
The big four banks were all in the red, led by a 2.2 per cent slump in ANZ as it brought forward the start date of incoming boss Nuno Matos, replaces Shayne Elliott after almost a decade in the top job.
Commonwealth Bank and NAB were down more than 0.6 per cent, and Westpac lost 1.7 per cent.
Miners also weighed heavily on the bourse with BHP, Rio Tinto and Fortescue Metals all down more than three per cent, after government figures projected mining and energy export profits to fall to $387 billion from $415 billion the year before.
Global growth concerns and their impact on the energy transition pushed lithium miners even lower, with Pilbara Minerals and Liontown Resources down 7.5 and 5.3 per cent respectively. Pilbara Minerals was the worst performer of the top 200.
The fresh data helped push Australian energy stocks 1.5 per cent lower, with oil and gas giants Woodside and Santos both down more than 1.3 per cent.
Oil futures were volatile in early trade after Trump threatened up to 50 per cent tariffs on countries that buy Russian oil, amid stalling peace talks with Ukraine. Brent crude futures were trading at $US72.41.
Consumer discretionary stocks were also feeling the pinch of potentially lighter wallets ahead, shedding 1.6 per cent as Bunnings and Kmart owner Wesfarmers lost 1.3 per cent, and buy-now-pay-later outfit Zip Co was down five per cent at midday.
The Australian dollar is trading at 62.93 US cents, slightly higher than 62.88 US cents at 5pm on Friday.
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