Trump Tariffs Hit Australia: Which ASX Stocks Win and Lose

When Donald Trump first implemented sweeping tariffs on global trade, Australia was undeniably impacted by the reverberations of his protectionist policies. Despite being far removed geographically, Australia’s trade relationships with the United States were directly affected by Trump’s tariffs, which targeted everything from steel and aluminium to consumer goods. In recent years, these policies have remained in place, and with the ongoing uncertainties of the post-Trump era, Australia continues to feel the economic effects.
According to US trade data, the US has imposed tariffs of up to 25% on selected Australian exports such as furniture and cabinetry, while softwood lumber faces lower or variable rates depending on classification. While the tariffs are designed to protect American industries, the consequences for Australian exporters and the ASX are considerable. The ripple effect of these tariffs extends across various industries in Australia, creating both opportunities and challenges for investors.

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The Global Impact of Trump’s Tariffs on Australia

Trade Diversion Effects

As US tariffs on Australian goods increase, global trade dynamics are forced to shift. Australia’s trade patterns, particularly in sectors such as agriculture and manufacturing, are expected to evolve as businesses seek alternative markets. Trade diversion refers to the process by which countries shift their trade focus to other markets to avoid the impact of tariffs. Australia is likely to see an increase in exports to China as the latter seeks alternative sources for goods previously supplied by the US.
According to Bloomberg’s trade report, Australian agricultural exports like beef, dairy, and wine have been hit hard by US tariffs, pushing some companies to pivot toward Asia. Australia’s beef exports to China have grown substantially, with Meat & Livestock Australia reporting a rise of approximately 50–60% over the past five years, driven by strong demand and trade diversification. With the US imposing tariffs on Australian beef, Australia’s agricultural sector is well-positioned to fill the gap in China’s beef market. GrainCorp (ASX: GNC), for instance, may benefit from increased grain demand in Asia, although its core business is more focused on grains and oilseeds than beef or dairy.
However, not all sectors will benefit from this trade diversion. Manufacturers, particularly in the electronics and automotive sectors, may face challenges as they rely on raw materials from the US. Increased production costs and supply chain disruptions could erode profit margins. Aristocrat Leisure (ASX: ALL), primarily focused on digital gaming, is less exposed to physical supply chain disruptions, though hardware components may face indirect cost pressures. Its diversification into global markets has helped mitigate some of these risks.

The Effect of the AUD/USD Exchange Rate

Another significant consequence of the Trump tariffs is their impact on the AUD/USD exchange rate. A tariff-induced slowdown in Australian exports to the US could lead to a weaker Australian dollar, as demand for the currency declines. A weaker AUD has both positive and negative effects for Australia’s economy. On the one hand, a lower AUD makes Australian exports cheaper and more competitive in the global market, helping sectors like agriculture to thrive. On the other hand, it increases the cost of imports, particularly for Australian companies that rely on US-made goods and components.
The Reserve Bank of Australia (RBA) has repeatedly stated that fluctuations in the AUD are an essential consideration for Australian businesses. For instance, Australian businesses that import machinery or raw materials from the US may face higher costs due to the devaluation of the Australian dollar. This increase in input costs could erode profits, particularly for industries like manufacturing and retail, which are sensitive to changes in the exchange rate.

Winners: ASX Stocks Set to Gain

Agricultural Stocks: A China Pivot

One of the major winners from the ongoing US tariffs is Australia’s agriculture sector, particularly companies involved in the export of beef, wool, and dairy. As tariffs continue to erode Australia’s market share in the US, Australian companies are shifting their focus towards Asia, with China emerging as a key destination for Australian goods. As a result, companies such as GrainCorp (ASX: GNC) and Elders (ASX: ELD) are better positioned to benefit from rising agricultural demand in China.
China’s growing middle class, combined with the trade diversion effects caused by the US tariffs, creates a unique opportunity for Australian agricultural exporters. According to Reuters, China is expected to become even more important as a trading partner, driving increased demand for Australian beef, dairy, and grains. The beef sector, in particular, could see significant growth as China looks to secure more of its meat supply from Australia. This trend is likely to continue as long as the US tariffs remain in place and China continues to diversify its import sources.

Resources Stocks: Indirect China Benefits

In the resources sector, Australia has long been a major supplier of key commodities like iron ore, coal, and natural gas. Despite the tariffs, Australia’s mining giants stand to gain from the continued demand for these commodities, particularly from China, the world’s largest consumer of iron ore and coal. Companies like BHP (ASX: BHP), Fortescue Metals Group (ASX: FMG), and South32 (ASX: S32) are all well-positioned to benefit from the China-led demand for Australia’s resources.
Despite tariff disruptions, BHP’s diversified portfolio, including iron ore and coal, positions it well to benefit from sustained demand in China. However, shifting trade patterns, particularly with the US, may affect certain market conditions for the company’s core commodities. Even though US tariffs are hurting some Australian exports, the ongoing demand for Australian resources from China acts as a buffer. The Australian Financial Review notes that, while the tariff pressures are high, mining remains a cornerstone of the Australian economy, with companies like BHP well-diversified in terms of their global market reach.

Tech Companies: Benefiting from Trade Shifts

Another sector that is likely to see growth despite the tariffs is the Australian tech sector. While Australian tech companies like Atlassian (NASDAQ: TEAM) and WiseTech Global (ASX: WTC) may benefit from shifts in regional trade flows, the full extent of this growth remains contingent on broader global market trends, particularly in the Asia-Pacific region. Both of these companies focus on software and services, which are less impacted by the physical goods tariffs that affect industries like manufacturing and agriculture.
Additionally, Australia’s tech sector has the opportunity to take market share from US-based competitors, particularly in the Asia-Pacific region. According to TechCrunch, Australian companies are increasingly benefiting from shifts in regional trade flows and finding opportunities to expand in markets such as China, India, and Southeast Asia, where demand for high-tech services continues to grow. This trend is expected to continue, with Australian tech firms benefiting from trade shifts and growing international demand.

Losers: ASX Stocks at Risk

Manufacturers and Retailers: Exposed to Higher Costs

The manufacturing sector in Australia faces the greatest risk from Trump’s tariffs. Australian manufacturers, particularly those in industries like furniture, electronics, and automobiles, rely on a range of imported raw materials and finished goods from the US. With tariffs on these imports rising, companies in the manufacturing space will likely face higher costs.
For example, Nick Scali (ASX: NCK), a furniture retailer, could be directly impacted by the 25% tariff on US-made furniture. As the cost of goods rises, these businesses will face pressure to either raise their prices or absorb the higher costs, which may harm their profitability. Similarly, Harvey Norman (ASX: HVN) and JB Hi-Fi (ASX: JBH) could see reduced margins due to their reliance on US-made goods, especially in electronics and appliances.

Australia’s Export-Led Sectors: Direct Impact on Key Goods

In addition to manufacturing, Australia’s export-led sectors, such as softwood lumber, wine, and furniture, face direct repercussions from US tariffs. For example, Treasury Wine Estates (ASX: TWE), a major exporter of Australian wine to the US, has faced challenges due to shifting US market dynamics and distribution changes, rather than direct tariff increases. These challenges have been compounded by changes in distribution agreements and shifting market dynamics in the US.
In 2025, President Trump announced a 100% tariff on imported pharmaceuticals unless companies manufacture domestically, a move that could affect biotech firms with limited US operations. CSL (ASX: CSL), which has significant manufacturing capacity in the US, is likely to be exempt, but smaller biotech firms may face increased regulatory and cost pressures.

Investor Takeaways: What to Watch

For investors, the key takeaway is that Trump’s tariffs are creating a dynamic environment that will require active monitoring. Agricultural companies, resources firms, and technology stocks are likely to be winners as the global economy adjusts to new trading relationships, particularly with China. However, manufacturers and retailers that are heavily reliant on US imports will need to adjust their strategies to cope with the added costs.
As ASX investors look to position themselves for future growth, paying attention to these macroeconomic trends will be critical in determining which sectors to target and which to avoid.

Conclusion

As the Trump tariff policies continue to shape the global trade landscape, Australian investors face a dynamic mix of risks and opportunities. While agriculture, resources, and tech sectors may thrive under the new trade conditions, manufacturers and retailers will need to navigate increased costs and supply chain disruptions. By closely monitoring these developments, investors can position themselves to capitalise on trade shifts and market disruptions, ensuring their portfolios are prepared for the challenges and opportunities ahead.

FAQs

• How do Trump’s tariffs affect Australian exports?

  Trump’s tariffs, particularly on softwood lumber and furniture, have made it more difficult for Australian businesses to maintain their presence in US markets. The impact will vary by industry, but agriculture and resources are likely to face less immediate disruption.

• Which ASX stocks are best positioned to benefit from Trump’s tariffs?

  Companies in agriculture, like GrainCorp, and those in the resource sector, such as BHP and FMG, stand to gain as China shifts demand to Australia due to US tariffs.

• Are Australian tech companies immune to the effects of Trump’s tariffs?

  Not entirely, but Australian tech companies focused on Asia-Pacific markets like Atlassian and WiseTech Global are less exposed to US tariffs and may see strong growth as trade patterns shift.

• How should I adjust my portfolio in light of these tariff changes?

  Consider focusing on sectors like resources and agriculture, which are likely to benefit from shifting global trade patterns, while being cautious with manufacturing and retail stocks facing tariff impacts.

• What will happen to the Australian dollar (AUD) as a result of these tariffs?

  The AUD may weaken as US tariffs reduce demand for Australian exports. While this could make exports cheaper and boost demand from other regions, it also raises costs for Australian companies importing goods from the US.