China is targeting more than 100 US products for tariffs in an escalating trade war with the Trump government.

Which ASX stocks could benefit?

Stockhead counted more than 20 small caps (see table below) that could be in the right place at the right time to reap an advantage from the China-US trade spat.

Monash University international trade law lecturer Dr Giovanni Di Lieto says the beef sector is one area where Australia could benefit from trade diversions.

“Australian beef producers will be much more competitive in exporting to China as their American competitors have to grapple with the 25 per cent tariff on their beef,” Dr Di Lieto wrote in The Conversation this week.

“On the other side, as China raises tariffs on soybeans, Australia could buy this product more cheaply from US farmers keen to find new distribution channels.”

Australia is reasonably safe from retaliatory action from the US, because of its negative trade balance — meaning it imports more from the US than it exports, Dr Li Lieto says.

Code Company Month price change Price March 12, 2018 Price April 9, 2018 Market Cap Chinese exports?
ABT ABUNDANT PRODUCE 0.1111111111 0.4 0.36 20.04M In the works
AS1 ANGEL SEAFOOD -0.0667 0.15 0.14 18.84M Aspirational
AVG AUSTRALIAN VINTAGE 0.03333333333 0.62 0.6 164.62M Yes
AWY AUSTRALIAN WHISKY HOLDINGS -0.2 0.04 0.05 23.98M Aspirational
BFC BESTON GLOBAL FOOD CO 0.1578947368 0.22 0.19 82.01M Yes
BAH BOJUN AGRICULTURE HOLDINGS 0 0.3 0.3 36.45M Yes
BEE BROO 0 0.17 0.17 103.40M In the works
BUG BUDERIM GROUP 0.1935483871 0.37 0.31 26.24M In the works
CZZ CAPILANO HONEY 0.04 16.9 16.25 153.21M Yes
CSS CLEAN SEAS SEAFOOD 0 0.06 0.06 96.70M No
DW8 DAWINE 0 0.01 0.01 5.26M Yes
FOD FOOD REVOLUTION GROUP 0 0.04 0.04 17.36M Aspirational
GRB GAGE ROADS BREWING CO 0 0.08 0.08 66.52M No
HUO HUON AQUACULTURE GROUP -0.035 4.57 4.41 385.16M Yes
MTM MARETERRAM 0.03703703704 0.28 0.27 41.72M Yes
MCA MURRAY COD AUSTRALIA 0 0.06 0.06 20.81M In the works
MRG MURRAY RIVER ORGANICS GROUP 0.1764705882 0.4 0.34 47.20M No
NAM NAMOI COTTON 0.01960784314 0.52 0.51 67.20M Yes
OGA OCEAN GROWN ABALONE 0 0.17 0.17 29.60M Aspirational
SFG SEAFARMS GROUP 0.2 0.06 0.05 70.18M No
TFL TASFOODS 0 0.17 0.17 36.15M No
WLD WELLARD 0.1666666667 0.14 0.12 63.75M Yes

The Chinese list of US goods it wants to tax also includes cotton, dried cranberries, wheat, and whisky.

Australian Whisky Holdings (ASX: AWY) and Murray River Group (ASX:MRG) have Chinese aspirations, while Namoi Cotton (ASX:NAM) supplies cotton mills there.

Dairy products have not yet been included in the tit-for-tat taxes and local formula exporters do not believe the trade spat will affect them much.

US dairy farmers have been losing market share for years in China anyway because of the higher tariffs on their products, according to the US Dairy Export Council (USDEC).

Where Australia companies can win, using Dr Di Leito’s logic, is picking up trade routes that could be strangled by US-China tariffs.

One example is China’s proposed 25 per cent tax on US soybeans, which it crushes to feed livestock, poultry and fish.

China is the largest buyer of soybeans in the world of which 40 per cent comes from the US, according to UN Comtrade.

Australian companies could be well-placed to supply gaps if Chinese fish, beef and pork farmers are forced to de-stock due to lack of feed. They could include Mareterram (ASX:MTM), Huon Aquaculture Group (ASX:HUO) and cattle exporter Wellard (ASX:WLD).

“Chinese consumers are now demanding more protein,” said Beston Foods (ASX:BFC) in its annual report last year.

“Chinese seafood consumption per capita for example, has tripled over recent years and now demands around 60 per cent of global aquaculture output. China has also become the worlds’ top meat eating nation.”