Got $10,000? These 2 Canadian Stocks Could Soar Despite Trump’s Tariffs

Not all Canadian stocks are set to drop during these trying tariffs, so let’s look at two.

| More on:
Income and growth financial chart

Source: Getty Images

In the ever-evolving landscape of global trade, recent developments have investors on their toes. With the reintroduction of tariffs by President Trump, many are re-evaluating their portfolios. Amidst the uncertainty, two Canadian powerhouses stand out as potential beneficiaries of the shifting trade dynamics — namely, Canadian National Railway (TSX:CNR) and Magna International (TSX:MG).

The Canadian stocks

CNR, a titan in North American rail transport, boasts an extensive network. One that seamlessly connects Canadian ports to the U.S. heartland. This strategic positioning is pivotal as companies seek efficient alternatives to circumvent tariff-impacted routes. In its recent earnings report, CNR announced revenues of $4.36 billion for the fourth quarter (Q4) of 2024. A slight dip from the previous year. Despite a 3% decrease in revenue ton-miles, the Canadian stock’s vast infrastructure and adaptability position it well to capitalize on the rerouting of goods necessitated by the new tariffs.

Meanwhile, Magna International, a leading auto parts supplier, is renowned for its diversified product range and global footprint. The reimposition of tariffs has prompted many automakers to reconsider their supply chains. Often favouring North American suppliers to mitigate costs. Magna’s strong presence in Canada and the U.S. makes it an attractive partner in this scenario. In Q3 2024, Magna reported sales of $10.3 billion, reflecting a 4% decrease from the same quarter in 2023. While global vehicle production faced challenges, Magna’s commitment to innovation and operational efficiency positions it favourably for future growth.

Bet on supply chains

Tariffs often act as catalysts for change, prompting companies to reassess and realign their supply chains. For CNR, this could mean increased rail traffic as businesses opt for rail over road to move goods across borders more cost-effectively. Magna, however, might see a surge in demand from automakers aiming to source parts closer to manufacturing hubs to avoid tariff-induced expenses.

Both companies have showcased resilience amidst external challenges. CNR’s operating income for Q4 2024 stood at $1.63 billion, a 10% decrease from the prior year, influenced by factors like labour stoppages and wildfires. Despite these hurdles, the company’s strategic initiatives and robust network infrastructure provide a solid foundation for future growth.

Magna, while adjusting its annual sales and profit forecasts due to anticipated lower vehicle production, remains a formidable player in the auto parts industry. The Canadian stock’s proactive approach to operational excellence and cost management underscores its adaptability in a fluctuating market.

Looking ahead, both CNR and Magna are strategically positioned to benefit from the evolving trade landscape. CNR’s expansive rail network offers a reliable alternative for businesses navigating new trade routes, while Magna’s extensive manufacturing capabilities and commitment to innovation make it a preferred partner for automakers seeking to optimize their supply chains.

Foolish takeaway

For investors with a $10,000 stake, these two Canadian stocks present compelling opportunities. The current market volatility, driven by tariff changes, may lead to short-term fluctuations. Yet the long-term prospects for CNR and Magna remain promising. The strategic advantages and resilience position them well to capitalize on the shifting dynamics of global trade.

So, while tariffs introduce complexities, these also open avenues for companies adept at navigating change. Canadian National Railway and Magna International exemplify such adaptability, making them worthy considerations for investors aiming to capitalize on the evolving trade environment.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Canadian National Railway and Magna International. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Caution, careful
Dividend Stocks

Trump’s 25% Tariffs: 2 Canadian Stocks That Could Take a Massive Hit

If there's one area of the market that could come under serious trouble, it's this one.

Read more »

Happy golf player walks the course
Dividend Stocks

Invest $15,000 in These 2 Canadian Stocks to Profit From Trump’s Tariffs

Trump tariffs are underway, but you can profit by investing in these Canadian stocks.

Read more »

engineer at wind farm
Dividend Stocks

Worried About the Trade War? These 3 Stocks Could Be Your Best Bet

These three top defensive stocks could help you navigate ongoing trade uncertainties by providing steady returns.

Read more »

how to save money
Dividend Stocks

Trump’s Tariffs Are Here: 1 Canadian Stock Set to Surge and 1 to Avoid

Heading into a new tariff regime, here's one Canadian stock to buy, and one to avoid!

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

Got $20,000? Buy These 2 Canadian Stocks Before Trump’s Tariffs Shake the Market

Not all Canadian stocks are set to be a dumpster fire under tariffs, and these two could belong in the…

Read more »

protect, safe, trust
Dividend Stocks

Secure 7% Yield: 3 TSX Income Stocks to Buy Now

These TSX stocks with fundamentally strong businesses and resilient earnings bases can help secure an over 7% yield in 2025.

Read more »

A meter measures energy use.
Dividend Stocks

Got $5,000? 3 Utility Stocks to Buy and Hold Forever

These three Canadian utility stocks offer steady growth, strong dividends, and long-term wealth. Buy and hold them forever

Read more »

jar with coins and plant
Dividend Stocks

Here Are My Top 2 Undervalued Stocks to Buy Right Now

Do you want some undervalued stocks to buy today? Whether its growth or income, here's a duo that make a…

Read more »