What if Trump’s trade war isn’t just economic chaos – but Australia’s golden opportunity?

While the U.S., China, Mexico, and Canada escalate their trade war with tit-for-tat tariffs, Australia finds itself in a unique position to capitalise. With supply chains shifting, the nation’s strength in key industries – where its quality and capacity already rank among the best – could give it a significant competitive edge.

Take agriculture – China’s retaliatory tariffs on U.S. agricultural goods, including soybeans and pork, will likely force Chinese importers to seek alternative suppliers. And who’s better positioned than Australia, a major trade partner with an abundance of high-quality beef, wheat, and dairy?

With American goods becoming pricier, Australian exporters are set to gain a larger share of one of the world’s biggest consumer markets. A notable ASX player worth watching in this space is Elders Limited (ASX: ELD).

Then there’s energy. China’s push to stabilise growth includes issuing 300 billion yuan in special treasury bonds to fuel consumer spending and industrial activity. This increased economic momentum is expected to drive up demand for Australian liquefied natural gas, already a key pillar of the nation’s exports. As a result, ASX-listed energy stocks may finally see a long-awaited resurgence after years of underperformance.

And it doesn’t stop there. Australia’s financial sector could also benefit as rising export demand fuels business investment. More investment means a greater need for financing, potentially lifting stocks and injecting fresh optimism.

Of course, much depends on China’s execution. But far from being collateral damage in a global trade war, Australia could emerge as one of the biggest winners – its economy strengthened, not shaken.

If both materials and financials align, the Australian market could be in for a year of surprising growth, driven by opportunity rather than disruption.

Best and worst sectors this week

The best performing sectors include Information Technology, Materials, and Communication Services, all up over 1%. The worst performing sectors include Energy, down over 5%, followed by Staples, down over 4%, and Utilities, down over 3%.

The best performing stocks in the ASX top 100 include REA Group, up over 7%, followed by Evolution Mining and Cochlear, both up over 6%. The worst include Treasury Wines, IDP Education, and Woodside, all down over 7%.

What’s next for the Australian stock market? 

Buyers were in short supply this week as sellers maintained their grip, dragging the All Ordinaries down more than 1%.

What makes this decline particularly notable is it marks the index’s first three-week losing streak since 2023. But time isn’t the only significant factor.

For the first time since September 2023, the market has closed more than 6% lower. What’s even more intriguing is how closely this mirrors past market behaviour. Back then, when the index last fell over 6%, it had previously rebounded from the same key 7,100 level, twice before, in March 2023 and December 2022.

Now, a similar pattern is unfolding. The index has already bounced twice from 8,400 points, first in November and again in December 2024. If history repeats, will this third test be the catalyst for a turnaround? The September 2023 decline ultimately became a major inflection point, leading to a 20% rally.

With reporting season behind us and April historically being a strong month for the index, this could be the beginning of another significant move higher. So, if buyers step in at 8,400, we might be on the verge of one of the year’s best opportunities.

However, if selling pressure breaks through the 8,400-point level decisively, the next key support level to watch is 7,900.

For now, good luck and good trading.

Disclaimer: While Wealth Within holds an Australian Financial Services License (AFSL:226347) the information featured in this program is general in nature and therefore should not be relied upon. Before making any investment decisions, you should consult a licensed professional who can advise whether your investment decisions are appropriate for you.

Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au.

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.