On Tuesday, Donald Trump implemented historic 25% tariffs on Canada and Mexico. The tariffs, ostensibly designed to curb the flows of illegal immigrants and fentanyl into the U.S., were widely panned by commenters. As of this writing at 11:00 am on Wednesday, there was hope that Trump might remove or reduce the tariffs later in the day. However, no word has been given as to whether Trump had clear plans to do so.
Tuesday’s tariff move came after a month-long delay in a tariff initially planned for February. Trump decided to pause the tariff to give Canada and Mexico time to act on fentanyl and migrants. Later in the month, Trump’s commerce secretary said that the two target nations had made progress on immigration but not on drugs. For this reason, he said, Trump moved ahead with the tariff.
This brings us to today. Most Canadian goods are currently subject to Trump tariffs, and some U.S. goods coming into Canada are as well. In this article, I will explore the three TSX stocks most subject to Trump tariffs.
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Nutrien
Nutrien (TSX: NTR) is Canada’s most tariff-vulnerable company according to research firm Syntax Data. It is a company that collects potash and turns it into fertilizer. Fertilizer is among the goods that the U.S. relies on Canada most heavily for, as the U.S. itself is lacking in the commodity. Nutrien is currently under a 25% Trump tariff.
The reason why Nutrien is so affected by Trump tariffs is because it is so extensively involved in supplying the U.S. with fertilizer. It sells far more product to the U.S. than it does within Canada. So, the majority of its revenue is exposed to tariffs. If Trump’s tariffs last, then NTR could take a hit. The bright side is that the U.S. has few good options for alternative suppliers, so Nutrien will probably continue shipping product into the States with the cost of tariffs being borne by the U.S. partners.
Brookfield Renewable Partners
Brookfield Renewable Partners (TSX: BEP.UN) is a company that, by its own admission, is likely to be affected by Trump tariffs. It is a major supplier of energy to the United States and, as such, is subject to the current 10% tariff on Canadian energy. In BEP’s case, the impact of the tariffs will probably be less than what’s seen at Nutrien. However, the company’s executives have already pledged to pass the cost of tariffs on to consumers.
Despite being hit with tariffs, BEP will likely fare okay this year. It supplies rare forms of clean energy that not every utility company supplies, so it will probably lock in its revenue in the long term.
Magna International
Magna International (TSX: MG) is a Canadian car parts company that is a major supplier to the U.S. auto giants. Its products are all presently subject to 25% tariffs. The company is likely to be impacted by tariffs because it supplies the auto industry, which is a major target for Trump. The president wants virtually all U.S. auto manufacturing to come back to the country. Magna supplies parts to both U.S. manufacturing plants and the plants of U.S. auto makers in Canada. So, it will probably take a hit from tariffs if they aren’t removed.
