The benchmark S&P/ASX200 index on Friday dropped 80.8 points, or 0.92 per cent, to 8,662.0, while the broader All Ordinaries fell 81.9 points, or 0.91 per cent, to 8,917.1.
The White House said tariffs on Australian exports would remain at the baseline rate of 10 per cent while imposing higher levies on more than 60 other countries including New Zealand, Fiji, Papua New Guinea and Canada.
Mexico was granted a 90-day tariff reprieve.
Moomoo dealing manager Paco Chow said the imposition of higher tariffs and more economic uncertainty worldwide was reigniting investor fear, with most markets and asset classes declining.
Traders were also awaiting the release of monthly US jobs figures known as the non-farm payroll report late on Friday, Australia time, and could influence whether the Federal Reserve cuts rates in September.
"Urgent tariff fears are compounding with worries we'll see fewer-than-expected US rate cuts and some US companies showing softer earnings," Mr Chow said.
For the week, the ASX200 was basically flat, dropping 4.9 points after a 90-point, 1.0 per cent loss the previous week.
AMP chief economist Shane Oliver said a strong performance in July, during which the ASX200 rose 2.35 per cent, had left valuations stretched.
A lot of good news had also been factored in, which leaves markets a bit vulnerable over the seasonally weaker months of August and September, Dr Oliver said.
Share markets were at risk of a correction over those months, but should provide reasonable returns through year-end, he said.
The Australian dollar had dropped to a two-month low against its strengthening US counterpart, buying 64.30 US cents near 5pm, from 64.73 US cents at a similar time on Thursday.
Ten of the ASX's 11 sectors finished lower, with utilities rising 0.7 per cent.
The technology sector was the biggest mover, dropping 2.4 per cent as Xero subtracted 3.5 per cent and WiseTech Global retreated 2.6 per cent.
In health care, ResMed rose 1.0 per cent to an all-time closing high of $42.88 after the CPAP devicemaker posted better-than-expected fourth-quarter earnings including 10 per cent revenue growth.
"Really, really excited to report these results," CEO Mick Farrell told AAP.
"It was a good performance across the board."
Elsewhere in the sector, 4D Medical soared 29.8 per cent to a six-week high of 30.5 cents after medical imaging giant Pro Medicus invested $10 million into its much smaller respiratory imaging peer.
In the heavyweight mining sector, Syrah Resources plunged 25.3 per cent to 27 cents after the graphite miner completed a $42 million capital raising at 26 cents a share.
The iron ore giants were mixed, with Fortescue rising 1.2 per cent to $17.98, Rio Tinto dropping 0.7 per cent to $110.90 and BHP edging 0.1 per cent lower at $39.22.
Rare earth miner Lynas rose 3.3 per cent and lithium miner Pilbara added 4.1 per cent.
In the financial sector, three of the big four banks finished in the red.
CBA fell 1.6 per cent to $175.06, NAB dipped 1.2 per cent to $38.44 and Westpac dropped 1.1 per cent to $33.45.
ANZ was the outlier, rising 0.5 per cent to $30.87.
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday dropped 80.8 points, or 0.92 per cent, to 8,662.0
* The broader All Ordinaries fell 81.9 points, or 0.91 per cent, to 8,917.1
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.30 US cents, from 64.73 US cents on Thursday.
* 96.84 Japanese yen, from 96.31 Japanese yen
* 56.25 euro cents, from 56.48 euro cents
* 48.70 British pence, from 48.75 British pence
* 109.44 NZ cents, from 109.11 NZ cents
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