When markets think of Donald Trump, they often think of volatility. Tweets that move oil prices, tariff threats that unsettle Asia, and the ever-present promise to “bring manufacturing home.”
Yet beneath the noise lies something far more structural, a reshaping of global trade that could define the next decade. And surprisingly, according to a new EY report, Australia might be one of the winners.

In an ironic twist of geopolitics, a world of trade walls and tariffs could create a golden window for Australian exporters, miners, and advanced manufacturers. It is a reminder that, in markets, disruption does not just destroy, it reallocates. The question is not whether the world will change, it is who stands to benefit when it does.

A New Trade War on the Horizon

At first glance, the return of Trump’s signature economic policy lever, tariffs appear inflationary and self-defeating. Global trade volumes would likely slow, manufacturing costs could rise, and the world might again brace for the “trade war” headlines of 2018. But peel back the political theatre, and a subtler dynamic emerges.

Multinationals have already spent five years re-engineering their supply chains. The lesson from COVID-19, the Ukraine war, and rising U.S.- China tensions are simple: resilience now matters more than efficiency. Friend-shoring, sourcing from allies rather than rivals, is not just a buzzword, it is becoming an industrial strategy. And this, EY argues, is where Australia’s opportunity lies.

The EY Thesis: Australia as a Geopolitical Safe Haven

The EY report, Trump Tariffs: Australia to Gain from Trade Shake-Up, flips the common narrative. Instead of seeing tariffs purely as a threat, it frames them as a potential trade diversion windfall for countries aligned with U.S. interests.

Australia, the report notes, is a trusted, resource-rich democracy sitting at the intersection of American strategy and Asian demand. As companies reroute supply chains away from China, they will look for reliable partners who can provide energy, minerals, food, and even technology inputs within a stable legal and political framework.

In short, when the U.S. redraws its trading map, Australia could find itself coloured in as a preferred supplier. This dynamic has precedent. When Trump’s first round of tariffs hit Chinese steel and aluminium in 2018, Australian exports to the U.S. actually rose. A similar pattern could play out again, but on a broader scale and with higher stakes.

Commodity Winners: From Lithium to LNG

Every trade cycle produces its commodity darlings. In the 2000s, it was iron ore and coal. In the 2020s, the new power plays are lithium, copper, nickel, and rare earths, the essential inputs of electrification, defence, and AI-era infrastructure.

If U.S. tariffs further isolate China’s manufacturing ecosystem, global firms will seek alternative sources of these critical inputs. Australia, already one of the world’s largest suppliers, stands to benefit disproportionately.

• Lithium: Pilbara Minerals (ASX: PLS) and IGO (ASX: IGO) could regain pricing momentum as the U.S. accelerates EV-supply independence.
• Copper and Nickel: Sandfire Resources (ASX: SFR) and Nickel Industries (ASX: NIC) may see long-term demand support.
• Energy and LNG: Woodside Energy (ASX: WDS) and Santos (ASX: STO) are positioned to supply allies seeking cleaner, non-Russian energy sources.

An overlooked beneficiary might be uranium, a commodity re-entering the conversation as countries pursue energy security over ideology. ASX names like Boss Energy (ASX: BOE) and Paladin Energy (ASX: PDN) could re-rate as geopolitical alignment drives policy support for nuclear baseload.

In this context, tariffs act less like walls and more like funnels, redirecting trade flows from China toward U.S. partners and their supply ecosystems. Australia’s role as a “trusted quarry” could evolve into something more strategic, the bedrock of allied industrial policy.

Defence, Technology, and AUKUS: The New Industrial Complex

The geopolitical dividend does not end with mining. The AUKUS agreement, and the broader technological integration between the U.S., UK, and Australia, signal a multi-decade commitment to shared defence and innovation pipelines.

While the headlines focus on submarines, the real opportunity lies in dual-use technology, AI, cybersecurity, advanced manufacturing, and sensors, where defence and civilian applications overlap.

Under a Trump administration prioritising industrial self-reliance, U.S. capital could flow into allied countries with aligned values and technical capabilities. Australian companies building secure cloud infrastructure, semiconductor materials, or defence tech could benefit from funding and procurement ties.

A few emerging beneficiaries to watch on the ASX include:

• Electro Optic Systems (ASX: EOS) – advanced weapons and satellite systems.
• DroneShield (ASX: DRO) – counter-drone and defence electronics.
• Codan (ASX: CDA) – communications equipment with both defence and commercial uses.

The AUKUS framework could become an industrial accelerator, binding the three nations into a shared innovation economy. And as capital moves to where it is geopolitically welcome, Australia could find itself at the forefront of this new “security-industrial” cycle.

Agriculture and Food Security: Quiet Winners in a Noisy World

Protectionism does not just change factory flows, it reshapes food supply too. If U.S. tariffs target South American or Asian exporters, Australian agriculture could quietly step into the gap.

EY highlights grains, meat, and dairy as potential areas of upside.

• The U.S. may lean on allies like Australia to help stabilise food inflation.
• China, meanwhile, may continue to import Australian barley, beef, and wine as bilateral relations thaw.

The result could be a dual-market opportunity, selling premium produce into Asia while benefiting from U.S.-aligned diversification in the West. With global food security once again in focus, Australian farmers could enjoy tailwinds not seen since the early 2000s commodity boom.

The Macroeconomic Picture: Inflation, FX, and the Trump Dollar

So, what happens to the broader economy if the Trump Trade 2.0 becomes reality?

Tariffs would likely raise U.S. inflation in the short term. That, in turn, could strengthen the U.S. dollar as capital flows chase higher yields and “America First” rhetoric draws funds home. A stronger dollar would usually mean a weaker Australian dollar, but this time, the story might be more complex.

If global investors see Australia as a geopolitical safe haven, a stable supplier of energy and minerals into the allied supply chain, then the AUD could decouple from its traditional risk-on behaviour. Think of it as a “Trump premium” for nations inside the U.S. economic perimeter.

For investors, that matters. A weaker AUD boosts export earnings for ASX companies, but it also makes offshore investments more valuable in local currency terms. Meanwhile, domestic inflationary pressures from higher global tariffs could nudge the RBA to maintain a cautious policy stance even as other central banks pivot.

In short, volatility would rise, but Australia’s relative resilience could shine through.

Risks and Counterpoints

Of course, this story is not one-sided. There are meaningful risks that could blunt or even reverse these tailwinds.

1. Chinese Retaliation: If Beijing views Australia as complicit in a U.S.-led containment strategy, it could selectively restrict imports again.
2. Inflation Feedback Loops: Tariffs raise prices, and higher inflation could erode consumer confidence and global growth.
3. Market Volatility: Equities could experience sharp swings as traders re-price global trade risk.
4. Policy Uncertainty: Trump’s unpredictability remains a wild card. Policies could shift overnight.

That is why valuation discipline and diversification remain central to the Tamim philosophy. We look for businesses with durable competitive advantages, low leverage, and strong cash generation, the kind that can withstand macro cross-currents rather than depend on them.

Investment Implications: Turning Policy Shock into Portfolio Opportunity

For long-term investors, the lesson is not to bet on the next U.S. election outcome, it is to recognise the direction of travel. The global system is fragmenting into economic blocs defined by trust, proximity, and politics. The efficient but fragile globalisation of the 1990s is being replaced by something messier but potentially more profitable for countries in the right networks.

Australia sits near the centre of one such network. It is allied with the U.S., embedded in the Indo-Pacific, and rich in the materials and expertise that the new industrial order demands. Whether it is lithium for EVs, LNG for baseload, or cybersecurity for defence, Australia’s relevance is rising.

From an investment perspective, that means:

• Looking for ASX companies with U.S. or allied supply chain exposure.
• Prioritising balance sheet strength in cyclical sectors like resources and manufacturing.
• Identifying technology and defence niches that benefit from AUKUS or allied industrial policy.
• Maintaining exposure to agriculture and infrastructure as physical-asset hedges against inflation.

Protectionism may make the world less efficient, but it also makes it more predictable in one respect, countries that share values and security ties will trade more with each other, not less.

A Broader Reflection: The End of the Free-Trade Era

Investors sometimes forget that the past 30 years of falling tariffs, open borders, and cheap labour were the anomaly, not the norm. History’s default setting is competition, not cooperation. What we are witnessing now is a reversion to the mean.

That does not mean we should fear it. The companies and nations that adapt, those that align their capital with security, technology, and resilience, can thrive in this new paradigm.

Australia, as the EY report reminds us, has a rare combination of resources, rule of law, and relationships that make it one of the best-placed economies to benefit from this shift. It will not be smooth sailing. There will be volatility, and the headlines will be noisy. But if the Trump Trade 2.0 is indeed coming, the smart money should already be positioning for it.

TAMIM Takeaway

In a world where walls are going up, Australia’s open-pit mines and open-data partnerships might just be its greatest strengths.
A new Trump administration could spark the next great rotation, away from hyper-globalisation and toward trusted-ally trade. For investors, that is not a reason for fear, it is a call to focus on the enduring advantages Australia already holds.

Trade wars make headlines, but alignment builds wealth.

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Disclaimer: Woodside Energy (ASX: WDS) is held in TAMIM’s Equity Income IMA’s as at date of article publication. Holdings can change substantially at any given time.