Another whirlwind week in financial markets. Last Monday’s AI meltdown is a distant memory, overshadowed by a flurry of trade announcements from the White House. This included big tariff hikes on Mexico, Canada, and China.

So far, Trump’s tariffs have not been as punitive as those threatened on the campaign trail. However, the announcements still caught the market off guard, triggering sharp corrections both here and in the US. Perhaps this isn’t surprising, given the bullish post-election rally.

Australia’s exports are not an obvious target for US tariffs. Trump uses the trade balance to determine if the US is ‘winning’ or ‘losing’ in a trade relationship. He’s criticized countries who run surpluses against the US, including China and the European Union. Australia, meanwhile, has run a trade deficit against the US for decades.

But that doesn’t mean we’re completely out of the woods. Many ASX companies do business in the US, some of which import goods from tariff-affected jurisdictions. Additionally, our mining sector is heavily reliant on demand from China, and the 10% tariff hike imposed this week could have spillover effects.

In this issue of Your Money Weekly, we investigate the ASX’s exposure to global trade. We find that revenue exposure to North America varies significantly across sectors, leaving some more vulnerable than others.

However, picking the ‘winners’ and ‘losers’ of a trade war isn’t always as simple as looking at where companies make money. Businesses with durable competitive advantages—or ‘moats’—are generally better equipped to handle external shocks. We’ll explore a case study in this issue.

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