Australian shares fell on Thursday's close, tracking Wall Street markets, after Trump implemented hefty tariffs on all imports to the US.

The S&P/ASX 200 fell 0.9% or 74.8 points to close at 7,859.7.

The move marks a sharp escalation in Trump's trade war, risking foreign retaliation and impacting businesses and consumers, with economists predicting higher prices and slower growth, Bloomberg reported.

"Eye-watering tariffs on a country-by-country basis scream 'negotiation tactic,' which will keep markets on edge for the foreseeable future," said Adam Hetts at Janus Henderson Investors.

On the domestic front, Australia's service business activity hit a seven-month high in March, with the seasonally adjusted S&P Global Australia Services PMI Business Activity Index rising to 51.6 from 50.8 in February.

Australia's goods surplus fell to AU$2.97 billion in February from AU$5.16 billion in January, according to data published by the Australian Bureau of Statistics.

Seasonally adjusted job vacancies in Australia fell 4.5% to 328,900 in the three months to February from the prior quarter, the Australian Bureau of Statistics said in a separate filing.

In company news, Fisher & Paykel Healthcare (ASX:FPH, NZE:FPH) said the 10% US tariffs on products manufactured in New Zealand will not significantly impact its full fiscal year net profit but are expected to drive higher costs in fiscal 2026. Shares of the company rose 3% at market close.

Shares in Ansell (ASX:ANN), Cochlear (ASX:COH), and Breville Group (ASX:BRG) all tumbled earlier in the day as companies most vulnerable to the Trump administration's sweeping tariffs grappled with uncertainties in the wake of the new policy. Ansell's shares fell past 14%, while shares of BRG fell 5% on market close.

Lastly, the Australian Prudential Regulation Authority (APRA) raised the capital add-on applied to ANZ Group Holdings (ASX:ANZ, NZE:ANZ) to AU$1 billion from AU$750 billion and accepted a court-enforceable undertaking from the bank. Shares of ANZ fell 1% at market close in Australia and 1% in New Zealand.