Beyond the Fear: How Trump’s Tariffs Could Unlock Hidden Value in These TSX Leaders

Global trade tensions have eased a bit over the last few weeks, with U.S. president Donald Trump striking a deal with the U.K. and suspending tariffs on China for 90 days. But for Canada, the pressure is still on. Tariffs on steel, aluminum, autos, and energy remain in effect — and the economic uncertainty they create is keeping many investors on the sidelines.

Still, this trade shake-up is opening the door to new opportunities. Some TSX-listed stocks have been unfairly punished by sentiment-driven selling despite having solid long-term fundamentals and limited exposure to U.S. tariff risk.

In this article, let’s explore how today’s trade fears could unlock real long-term value in these two undervalued TSX leaders.

Magna International stock

Magna International (TSX: MG) has been struggling in recent months, with the stock down nearly 22% over the past year. But for patient investors, especially those thinking beyond the current trade friction, this pullback could be an opening to grab a solid long-term stock in the auto space.

This Canadian auto parts giant with a global footprint builds everything from seats and powertrains to full vehicle assemblies for some of the world’s biggest carmakers. Right now, MG stock trades at $50.50 per share with a market cap of $14.3 billion. It also offers a quarterly dividend that works out to a healthy 5.4% yield annually.

In the first quarter of 2025, Magna’s sales fell 8% YoY (year over year) to US$10.1 billion. That drop was tied to lower light vehicle production in Europe and North America, the end of some vehicle programs, and weaker foreign currencies.

Although Magna’s earnings took a hit too in the latest quarter, it’s continuing to beat internal expectations with the help of stronger-than-expected production and solid cost control.

Moreover, it’s actively cutting costs, pulling back on spending, and focusing on productivity to soften the blow from tariffs and other headwinds. And that’s the part many investors might be missing. Backed by solid product pipelines and a global auto footprint, this TSX stock has the potential to stage a strong rebound once the trade uncertainty clears.

Premium Brands stock

Premium Brands Holdings (TSX: PBH) is another top TSX stock that’s seen weak momentum lately but one that could fit right into long-term investors’ watchlist — especially as markets wrestle with trade tensions. The stock is still down more than 8% over the past year, even after a short-term rebound.

The company makes and distributes specialty food products. Right now, PBH shares are trading at $83.78 with a market cap of $3.8 billion. It also offers quarterly dividends with an annualized yield of around 4.1%.

In the first quarter, Premium Brands posted record sales that jumped 15% YoY to $1.7 billion. That increase came from growth in U.S. sales and key categories like protein and sandwiches. Its quarterly adjusted earnings also climbed, even as cost pressures and new acquisitions trimmed some margins.

With new facilities ramping up in the U.S. and a healthy merger and acquisition pipeline, PBH is investing with a long view. It’s also managing tariff risks well, and that could make this stock a sleeper hit once trade tensions cool.