The bans on copper and sugar have not been officially announced but media reports suggest it will happen this week.
For Chinese importers the potential banning of Australian suppliers will be enough for many to look to other countries for replacements.
The unofficial means used by the Chinese government allows it to deny the trade moves are politically motivated.
For its part the Australian government has been attempting to avoid labelling the situation as a major diplomatic falling out. It leaves many Australian exporters engaging in an exercise of shadow boxing.
The cost of the exports to China has been put as high as $6 billion annually. The potential damage to individual companies will depend on how successful they are at finding alternative international markets.
Thus it was Australian listed companies that rely heavily on selling into the China market whose shares suffered on Tuesday.
Copper-exposed Sandfire Resources led the charge down on Tuesday morning,followed by Treasury Wine Estates,United Malt Group,A2 Milk,Oz Minerals,Iluka Resources and IDP Education. These were the islands of red among the sea of green on the ASX lists.
Loading
Sandfire,which exported 93 per cent of its product to China in 2020,told the ASX on Tuesday it was not aware of the validity of the reports but said it was confident it could find new customers.
So much for Australian investors’ pre-US election jitters. Before the ASX opening,futures markets were primed for a lacklustre performance - one without much direction. The reality was,in contrast,euphoric as investors were hyped up by the prospect of the Reserve Bank’s 2.30 pm announcement it would slash interest rates and move into unchartered quantitative easing.
When confirmation was received the market took another leg up. The Reserve Bank statement suggested it would do whatever it takes to stimulate the economy,keep a lid on unemployment,support inflation and keep the domestic currency in check.
There was no end-date on keeping the cash rate at 0.1 per cent.
Meanwhile,the stock market appeared unconcerned about the drip-feed of US polls during the day that suggested Democrat Joe Biden’s lead over Trump had narrowed.
Australian business leaders have,in recent days,been reluctant to pick or support either candidate. They are more concerned with the prospect of uncertainty. A definitive win by either candidate will provide some calm to markets in the US and ultimately in Australia.
The Australian market will be one of the first to respond to the outcome of the US election so it will be closely watched internationally.
Business Briefing
Start the day with major stories,exclusive coverage and expert opinion from our leading business journalists delivered to your inbox. Sign up for theHerald's here andThe Age's here.