While most stock market headlines focused on Canadian steel, aluminum, and softwood lumber tariffs, which Prime Minister Mark Carney recently called “unjustified, unwarranted, and fundamentally misguided,” savvy investors could find undervalued trading opportunities beyond the obvious affected sectors in hidden casualties in Canada’s corporate landscape. The ripple effects of President Trump’s tariffs revealed unexpected vulnerabilities in Canadian transportation, apparel, and even telecom stocks in 2025.
Image source: Getty Images
Gildan Activewear: The apparel giant’s unexpected tariff vulnerability
Gildan Activewear (TSX:GIL) stock has suffered a staggering 31.6% year-to-date drawdown as tariffs weigh heavily on its market value. Though vertically integrated, Gildan’s Achilles heel lies in its global manufacturing footprint.
While the company spins yarn at seven U.S. facilities, the majority of its value-adding operations – knitting, dying, cutting, and sewing –occur at 22 factories across Honduras, Nicaragua, the Dominican Republic, and Bangladesh. With the U.S. implementing a 10% baseline “reciprocal” tariff plus country-specific “penalties” (18% on Nicaraguan and 37% on Bangladeshi imports), Gildan faces significant operating headwinds.
This exposure is particularly concerning for GIL stock, considering 89% of Gildan’s 2024 revenue came from the United States. The question remains whether the company can successfully pass these new costs to consumers without losing market share.
TFI International: Transportation troubles mount
TFI International (TSX:TFII), once a high-flying TSX growth stock, has plummeted 50% year-to-date. The transportation and logistics company was already battling what management called a “freight recession” before U.S. tariffs introduced new complications.
TFI hauls substantial volumes of steel and aluminum across the Canada-U.S. border. The new tariffs not only threaten to reduce these freight volumes but also create secondary effects. As competitors who relied on metal shipments lose business, they may aggressively target TFI’s customer base, further pressuring rates when margins are already shrinking.
While cross-border hauling represents just 4% of TFI’s annual revenue (compared to 70% U.S. domestic freight revenue and 25% Canadian domestic freight), the broader economic impact of tariffs could dampen U.S. consumer confidence and deepen what CEO Alain Bedard described in a February earnings call as a “very deep freight recession” with a “very difficult quarter” ahead.
Despite these challenges, TFI International stock continues to generate strong free cash flow and recently increased dividends by 13% while planning stock repurchases and debt reduction in 2025.
Today’s 52-week lows could present buying opportunities for long-term-oriented investors looking to hold TFI stock beyond a seemingly temporary sectoral “recession”. TFI’s acquisitions-led growth strategy remains intact, and could help improve load densities in the United States to improve future operating margins.
A TSX telecom stock’s tariff tribulations
Perhaps most surprising is the predicament potentially facing Sangoma Technologies (TSX:STC), a Canadian telecom stock experiencing a perfect storm of challenges. Already reeling from contract cancellations by the Elon Musk-led Department of Government Efficiency (DOGE), which necessitated a strategic business shift early this year, Sangoma now faces an unexpected tariff threat.
The company generates 94% of its revenue from the United States, and sales include some hardware components imported into the country. Management’s initial tariff mitigation strategy relied heavily on its contract manufacturers in Vietnam, which it believed would remain exempt from U.S. tariffs. That calculation proved wrong when the United States imposed a staggering 46% tariff rate on Vietnamese imports – one of the highest rates on the White House’s published list.
While these reciprocal tariffs have been delayed by 90 days, Sangoma’s Vietnamese “tariff haven” appears compromised, with a baseline 10% reciprocal tariff already in effect.
For a company that derives a significant portion of its revenue from the U.S. market, tariff developments threaten to compound Sangoma’s existing operating challenges. The company’s stock is down 36% year-to-date.
Investor takeaway
The true impact of tariffs often extends far beyond the obvious targets. For Canadian investors, understanding these hidden vulnerabilities requires looking beyond recent aluminum and steel tariffs to examine supply chains, manufacturing locations, and revenue dependencies for stocks within your portfolio. This could be overwhelming; however, joining an investment forum led by professional analysts could make the task easier.
As tariffs work their way through the economy over the next two years, consumers will ultimately bear the import costs through higher prices. Meanwhile, investors who identify both the obvious and obscured tariff casualties may find undervalued investment opportunities or take early flights to safety amid the market’s current volatility.
