Six Months of Trump.
What Has It Meant for Australian Investors?
Six months ago, few Australian investors would have built a portfolio around Donald Trump. Yet his decisions have shaped some of the biggest moves on the ASX this year.
Tariffs have redrawn commodity flows. Tension with China has pushed up the strategic value of critical minerals. Pressure on American allies has driven higher defence spending. Conflict with Iran has pushed energy prices higher. And plans to rebuild American manufacturing and infrastructure have lifted demand for materials like copper and steel.
The result on the ASX has been anything but uniform.
- Santos is up more than 20% over six months. BHP (BHP.ASX) has gained over 15%. Woodside (WDS.ASX) has climbed around 14%.
- Meanwhile Fortescue (FMG.ASX) has fallen more than 14%, Lynas Rare Earths (LYC.ASX) is down around 14%, and DroneShield (DRS.ASX) has lost more than half its value.
The lesson isn’t that Trump makes Australian shares rise or fall. It’s figuring out which companies sit directly in the path of his policies. Six months into 2026, we have some early evidence. The real question is what the next six to twelve months might bring.
The first surprise has been resources
If you’d been told six months ago that Trump would keep up the trade fight with China, you might have steered clear of Australian mining stocks altogether. That would have been too simple.
BHP has been one of the stronger performers on the ASX. Fortescue hasn’t. The difference tells us something useful.
Fortescue remains heavily tied to iron ore, and therefore to Chinese steel demand. BHP has iron ore too, but it also carries growing exposure to copper, and copper has become one of the commodities sitting squarely in the path of Trump’s economic agenda. America wants more power generation, more transmission infrastructure, more data centres, more defence production, and more manufacturing on home soil. All of that needs copper. Now add the possibility of US tariffs on refined copper imports from 2027, and the market has already started to respond: copper has traded close to record levels as metal moves into the US ahead of possible tariffs, tightening supply everywhere else.
So while Trump’s China policy is a potential headwind for iron ore, his industrial policy is a tailwind for copper. BHP sits on both sides of that equation. Fortescue doesn’t. That distinction matters.
Energy has been harder to ignore
Then there’s oil and gas. Santos (STO.ASX)and Woodside have been among the strongest performers on the ASX over the past six months, though Trump’s policies are only part of the story. The bigger driver has been the conflict involving Iran and the risk it poses to energy flows through the Strait of Hormuz, a corridor that historically carries around a fifth of the world’s oil.
On 30 August, US forces struck Iranian rocket launchers on Larak Island, after Washington said the launchers were being readied to deploy sea mines into the Strait.
For an Australian energy producer, higher global oil and LNG prices flow straight into the earnings equation. For Qantas (QAN.ASX), higher fuel prices flow the other way. Same event, opposite sides of the ledger.
That makes the next six months harder to predict. Trump has also flagged plans to use Venezuelan oil to top up America’s Strategic Petroleum Reserve; bringing more Venezuelan supply back into global markets would, eventually, work against high oil prices. So the energy trade comes down to a question: does geopolitical tension keep supply tight, or does Trump eventually succeed in getting more oil onto the market? Woodside and Santos are positioned to benefit from the first outcome. Consumers, airlines and transport companies would prefer the second.
Then we get to rare earths
This is where the next six months start to look more interesting than the last six.
Trump has moved from talking about critical minerals to treating them as a national security issue. In July, the White House ordered US defence supply chains to source critical materials domestically or from allied nations wherever possible. Ten days later, he signed another determination stating that America’s dependence on foreign critical minerals posed a risk to national defence. Australia is an allied nation, and Australia has something America needs: minerals.
Lynas Rare Earths is already the largest producer of separated rare earths outside China. It’s expanding its international supply relationships and helping build a US magnet supply chain, and demand for material produced outside China is strengthening. Yet Lynas shares have fallen over the past six months.
At first glance, that seems strange: the geopolitical story has improved while the stock has gone backwards. But that’s exactly why the example matters. Investors had already priced in a lot of the critical-minerals story, and then Lynas disappointed the market on operating performance and costs. A good theme doesn’t automatically make a good investment at every price.
The next six to twelve months will test whether earnings start catching up with the strategic story. If they do, Lynas becomes one of the most interesting Australian companies exposed to Trump’s push to cut US dependence on China. Iluka Resources (ILA.ASX) and Arafura Rare Earths (ARU.ASX) sit in the same broader theme, though at different stages and with different risks.
Defence is becoming an Australian story too
Trump has spent years arguing that America’s allies need to spend more on their own defence. Australia is now doing exactly that. In April, the government announced plans to lift defence expenditure to 3% of GDP by 2033, including another $53 billion over the coming decade.
That creates a large pool of potential spending. Companies like Electro Optic Systems (EOS.ASX), Austal (ASB.ASX) and DroneShield all have exposure to it, yet their share prices have moved in completely different directions, and that tells us something important. Government spending creates the opportunity, but the company still has to win the contract, deliver it, and make money from it.
The defence theme looks stronger heading into 2027 than it did heading into 2026. That doesn’t mean every defence share will rise. The more useful question is which companies actually convert higher defence budgets into orders, revenue and profit.
Steel gives us one of the cleaner examples
BlueScope Steel (BSL.ASX) offers a different kind of Trump exposure. It’s an Australian company with major steel production inside the United States, and that distinction matters. Trump’s tariffs make imported steel more expensive, but BlueScope’s North Star mill produces steel in Ohio, so it sits inside the protected US market rather than trying to export into it.
BlueScope has outperformed the broader Australian market over the past six months. There are other factors at play too, including corporate takeover activity, but the strategic position is worth understanding on its own: Trump wants more things made in America, and BlueScope already makes steel there.
And then there is the Australian dollar
This part often gets overlooked. Trump doesn’t need to change an Australian company’s earnings directly he can change the value of the currency those earnings arrive in. Trade tension, interest-rate expectations, commodity prices and moves in the US dollar all feed into the Australian dollar.
For companies earning large amounts overseas, a weaker Australian dollar lifts the Australian-dollar value of those earnings. For companies importing goods priced in US dollars, it pushes costs up.
That means the next Trump announcement might have no obvious link to Australia on the surface, yet still affect Australian healthcare companies, retailers, manufacturers and miners purely through currency movements. When you’re looking at an ASX company, where its revenue actually comes from matters.
So what does the next six to twelve months look like?
I don’t think the most interesting question is whether the ASX 200 finishes the year 10% higher or 10% lower. The forces underneath the index are more interesting than the index itself.
Trump’s policy direction is becoming clearer. America wants less dependence on China, more domestic manufacturing, secure access to critical minerals, its allies spending more on defence, and greater control over strategic supply chains and it’s willing to use tariffs to get there.
Those policies don’t point to every Australian company. They point to a specific group of them. BHP and Sandfire (SFR.ASX) sit in the copper story. Lynas, Iluka and Arafura sit in critical minerals. Woodside and Santos sit in global energy. EOS, Austal and DroneShield sit in defence. BlueScope sits inside American manufacturing. Gold producers such as Newmont (NEM.ASX), Northern Star (NST.ASX) and Evolution (EVO.ASX) remain exposed to another consequence of the Trump era: greater financial and geopolitical uncertainty.
The companies facing a harder road are becoming clearer too. Businesses heavily dependent on cheap imports are more exposed if tariffs disrupt supply chains or the Australian dollar falls. Airlines don’t want higher oil prices. Companies dependent on Chinese growth stay exposed to any escalation in the US-China trade dispute. And interest-rate-sensitive businesses face a difficult combination if tariffs keep global inflation higher.
There is one lesson from the last six months worth carrying into the next six
The market rarely follows the headline as neatly as we expect. Trump increased pressure on China, and BHP rose. America sharpened its focus on rare earths, and Lynas fell. Defence spending increased, and one Australian defence company rose while others fell sharply. Gold stayed strong while several Australian gold miners struggled.
The policy tells you where to look. It doesn’t tell you what to buy. For investors, that distinction matters.
The next six months will bring another tariff announcement, another statement on China, another defence decision, another geopolitical surprise, and another rush to decide whether the news is good or bad for markets.
Maybe there’s a better question to ask. When Trump announces his next policy: who gets paid if he follows through? Then look for the Australian company sitting on the other side of that transaction.
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