Trade exposure audit
Identify which markets and products expose a client’s trade footprint to shocks. The audit surfaces the handful of partner-product cells that carry most of the risk, benchmarks them against sectoral and regional peers, and pins down the share of recent export growth that is structural versus cyclical. The output is a ranked risk map that a commercial or policy team can act on, not a dashboard to browse.
Problem we solve
Most trade footprints are far more concentrated than their headline numbers suggest. A mid-sized exporter typically discovers, on inspection, that two to four bilateral partner-product cells account for half of its merchandise revenue, that half of its import bill for a critical input sits with a single origin, or that a recent boom in one destination masks underlying share loss elsewhere. When a shock arrives, whether tariff, sanctions, logistics disruption, or a demand collapse in a key partner, that concentration is what determines whether the hit is a nuisance or a balance-sheet event.
The audit answers four questions. Where is the exposure concentrated, on both the exporter and importer side? How does that concentration compare to peers in the same sector or income class? How much of recent performance is a genuine competitiveness gain versus a favourable partner or product mix? And how would a plausible shock, such as a sudden decline in one partner’s import demand, transmit through the current basket?
What we analyse
The core unit is a bilateral flow panel at HS6 by partner by year, filtered to the client’s sectors and mirrored against the rest of the world for benchmarks. On top of that panel we run a share-shift decomposition that breaks recent export growth into a partner-mix component (how fast the client’s partners are importing from the world), a product-mix component (how fast those products are growing in world trade), and a residual competitiveness component. Peer benchmarks place the client against size-matched and sector-matched comparators drawn from BACI and the CEPII Gravity dataset.
Concentration is measured on both sides: exporter-side HHI across destination markets and importer-side HHI across origin markets, at HS6 and at aggregated sector groupings. An ADH-style China-shock exposure index, following Autor, Dorn and Hanson (2013), flags product lines where rising low-cost competition has meaningfully reshaped the market in the last decade, and indicates which of the client’s export lines sit on the wrong side of that frontier.
Data used
CEPII BACI at HS6 for bilateral flows from 1995 forward, with values stored in thousands of USD and harmonised across mirror reports. CEPII Gravity for bilateral controls (distance, common language, contiguity, colonial ties, GDP and population). World Bank WDI for per-country macro and income classification. WITS for applied tariffs and MFN rates at the HS6 line. Client customs data, if provided, is matched to the BACI cell structure so that public and private numbers line up at the same grain.
Where the client provides transaction-level customs extracts, we reconcile them to BACI totals line by line, flag any material differences, and retain the client grain for the internal sections of the deliverable. No private data appears on the public TradeWeave site; the Parquet corpus used for benchmarks is open.
Method sketch
Share-shift decomposition follows the canonical Nazara-Hewings and Dinc formulations: a country’s export growth over a given window is decomposed into a national-growth baseline, an industry-mix effect, and a competitive-shift residual. We run the decomposition at HS2 and HS4 and present both for the target sectors. Concentration is reported as HHI at partner and product level, with the point estimate and a Bayesian shrinkage correction for small cells so that a handful of low-value lines do not drive the ranking.
The China-shock exposure index follows Autor, Dorn and Hanson (2013) in spirit: for each HS6 line we compute the ten-year change in low-cost-producer import penetration in the client’s principal destination markets and the client’s share of the competing basket, then aggregate to sector and to the client footprint. Where cell counts are thin, posterior estimates use a hierarchical prior shared across sector and partner, which tempers the ranking without hiding genuine tail risk.
Deliverable
A fifteen-page tearsheet covering the four questions above, with a ranked risk map on the front page, three peer-benchmark figures, the share-shift decomposition table, and the China-shock exposure panel. The brief names the top five partner-product cells by exposure, quantifies the hit under a standard adverse scenario, and flags any cells where the evidence base is thin enough that the ranking should not be acted on without further work.
Alongside the brief, the client receives a Parquet slice of the treated series, including the bilateral panel, the share-shift breakdown, the HHI time series, and the China-shock exposure scores. Rank tables are provided as CSV for easy re-use in a client’s internal tools. The underlying DuckDB queries are documented so that a client analyst can reproduce every figure without us.
Related workbench pages
The public workbench covers the same terrain on an open-data basis and is the fastest way to see the method in action before commissioning. For country-by-country baseline reads, see the country scorecard and the rankings page. For the concentration and supply-chain side, see concentration, the supply-chain overview, and the impact pages on the China shock, cross-country impact studies, and the ongoing US-China trade war.
Timeline
Typical engagement runs two weeks from data handoff to final brief. Week one covers reconciliation, sector scoping, and the baseline figures; week two covers the share-shift decomposition, the China-shock overlay, and the written brief. Timelines expand where client customs data requires cleaning or where the audit scope covers multiple independent business units.
Start a conversation
If a trade exposure audit fits the current question, contact us with a short description of the business unit or policy frame and the decision the audit should inform. We reply within two business days with a scoping memo and an indicative timeline.