What Investors Get Wrong About Trade Wars | Kai Wu

Excess Returns

In this episode of Excess Returns, Kai Wu of Sparkline Capital returns to break down his latest research piece, Investing Amid Trade Wars. Using over two dozen insightful visuals, Kai explores how investors should think about global trade exposure in an era of rising tariffs, economic nationalism, and geopolitical uncertainty. He makes the case for staying invested in high-quality multinational companies—especially those rich in intangible assets—and offers four actionable ways to build more resilient global portfolios. Topics Covered:

Why the market reaction to tariffs is both rational and potentially short-sighted

The long-term outperformance of global vs. domestic firms

How to define and measure global trade exposure at the company level

Real-world trade shocks and what they reveal about investor behavior

The four traits of resilient global firms

Why intangible-heavy businesses are uniquely positioned to weather trade disruptions

International vs. U.S. multinationals: hidden value in non-U.S. stocks

Practical suggestions for portfolio construction in a deglobalizing world