The looming trade war between the United States and China heated up on Friday, June 15, 2018. U.S. President Donald Trump confirmed that the first round of tariffs affecting $34 billion worth of Chinese goods will begin on July 6, 2018, and that a further round of $16 billion in duties was under review. In retaliation, China, the world's second largest economy, hit back, taking political aim at Trump's heartland supporters by introducing its own $50 billion worth of tariffs on products such as soybeans, a range of seafood and pork products, and several types of hybrid electric vehicles. (See also: 5 Chip Stocks at Risk in an Expanding Trade War.)

The situation escalated on Monday, June 18, when President Trump vowed to impose an additional $200 billion worth of tariffs on items if China follows through with its promise to retaliate against U.S. tariffs. As the tit-for-tat trade war blows continue between these two economic heavyweights, investors can look for opportunities in countries that are likely to benefit directly from China's retaliatory tariffs if they are, in fact, imposed. The following three country exchange-traded funds (ETFs) provide exposure to economies that look set to benefit from reduced U.S. supply and competition when exporting to China.  (See also: Trump, Xi and Trade: Trade's Biggest Winners and Losers by State.)

VanEck Vectors Brazil Small-Cap ETF (NYSEARCA: BRF)

Launched in 2009, the VanEck Vectors Brazil Small-Cap ETF seeks to provide similar returns to the MVIS Brazil Small-Cap Index. The fund achieves this by investing at least 80% of its assets in securities that make up the benchmark index. These securities are small-capitalization Brazilian-listed companies. The ETF's top three holdings are Transmissora Alianca de Energia Eletrica S.A. (BVMF: TAEE11), CVC Brasil Operadora e Agencia de Viagens S.A. (BVMF: CVCB3) and Cia de Saneamento do Parana (BVMF: SAPR11). In total, BRF holds 59 stocks in its basket.

The VanEck Vectors Brazil Small-Cap ETF has assets under management (AUM) of $79.75 million and charges investors an annual management fee of 0.60%, which is well above the category average of 0.19%. A 5.42% dividend helps offset higher management expenses. Although BRF has a disappointing year-to-date (YTD) return of -22% as of June 2018, the fund has plenty of upside potential if China, the world's largest importer of soybeans, starts giving Brazil preferential pricing for soybeans after U.S. soybean tariffs take effect from July 6, 2018. The ETF provides direct exposure to the soft commodity through its holding of SLC Agricola S.A. (BVMF: SLCE3), one of Brazil's largest agricultural producers. (For more, see: Can Emerging Markets Dodge an Emerging Disaster?)

Global X MSCI Argentina ETF (NYSEARCA: ARGT)

Formed in 2011, the Global X MSCI Argentina ETF attempts to mirror the performance of the MSCI All Argentina 25/50 Index by investing a minimum of 80% of its assets in securities, which include American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) that make up this index. The ETF provides exposure to companies that are headquartered or listed in Argentina and conduct most of their operations in the country. The fund is top heavy, with its top two holdings of MercadoLibre, Inc. (NASDAQ: MELI) and Tenaris S.A. (NYSE: TS) carrying a weighting of 38.91%.

The Global X MSCI Argentina ETF has $145.57 million in net assets and charges a 0.59% management fee. As of June 2018, ARGT is trading at $28.06, slightly above the low end of its 52-week trading range between $27.40 and $38.46. Over the past five years, the fund has returned 11.25%. This ETF doesn't provide direct exposure to soybeans but is likely to benefit if Argentina's agricultural sector, which accounted for 10.9% of the country’s gross domestic product (GDP) in 2017, gets a boost from increased trade with China. (See also: 3 Ways You Can Invest in Argentina From the U.S.)

iShares MSCI Australia ETF (NYSEARCA: EWA)

The iShares MSCI Australia ETF (NYSEARCA: EWA), created in 1996, tracks the MSCI Australia Index. The fund does this by investing its $1.45 billion asset base in securities that are constitutes of the underlying index. The ETF invests in large- and mid-cap Australian stocks that capture 85% of the publicly traded market. EWA's portfolio of 68 stocks makes it a reasonably diversified fund. Key holdings include Commonwealth Bank of Australia (OTC: CBAUF) with a weighting of 9.09%, BHP Billiton Ltd. (NYSE: BHP) with a weighting of 8.11% and Westpac Banking Corporation (NYSE: WBK) with a 7.14% weighting.

The iShares MSCI Australia ETF is moderately priced, with an expense ratio of 0.49%, and it provides an enticing 4.54% dividend yield. EWA has five- and three- year annualized returns of 3.45% and 5.28%, respectively. As of June 2018, the fund has returned -2.11% YTD. Australia's wine exports to China rose to a record 848 million Australian dollars, or $626 million, in 2017 and should continue to increase throughout 2018 and beyond as U.S. wine exporters face a 15% tariff. Investors gain direct exposure to Australia's wine industry through the fund's holding of Treasury Wine Estates Limited (OTC: TSRYY). (See also: Investing in Fine Wine.)

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.