Trade tensions have been the talk of the town for the last 12 months. Ever since U.S. President Donald Trump took office in January of 2025, Canada’s trade picture has been more volatile than usual, leading many to wonder if there will ever be a return to normalcy.
Tariffs have increased. Exports have been volatile. Politicians have resorted to extraordinary measures. The pressures have been so intense that Prime Minister Carney had to sign a trade deal with China that would have been unthinkable just a year ago. And indeed, the pressures have had their real world effects. For example, 2025 GDP growth was a mere 1.3%, lower than in previous post-COVID years.
Nevertheless, many Canadian companies are thriving despite the trade tensions. Particularly in industries that are primarily domestic, or international but not involved in cross-border trade, performances have been surprisingly good. In this article, I explore the Canadian companies that are thriving despite trade tensions.
Banks
TSX banks are among the best examples of Canadian companies that are thriving despite trade tensions. The Big Six Banks primarily lend money within Canada. They also have extensive foreign operations, but since their U.S. operations take place entirely within the U.S., the services rendered are not considered exports. These realities have insulated TSX banks from the effects of Trump’s tariffs and the tense 2025/2026 trade situation more broadly.
Consider Royal Bank of Canada (TSX:RY), for example. Royal Bank (sometimes called ‘RBC’) is a Canadian bank that is genuinely thriving this year, as well as in the trailing five-year period.
Royal Bank has two main geographic segments:
- Canada. Here RBC is involved in retail banking (deposits & loans to ordinary Canadians), investment banking and wealth management.
- International. This mainly consists of investment banking and wealth management in the United States, and wealth management in the Caribbean.
As you can see, RBC has considerable U.S. exposure. Despite that fact (or even because of it), the bank is thriving, with 15% revenue growth, 25% earnings growth, and a 33% profit margin in the trailing 12-month period. The bank’s U.S. services are not considered exports, which is part of why it’s doing well despite considerable U.S. exposure.
Interest rates are presently stabilizing in Canada and expected to decline in the United States. This might put some pressure on RBC’s core lending operations; but on the flip side, it could be bullish for the company’s investment bank. Over the very long run, RBC should do fine.
Energy
Another Canadian sector that is doing pretty well amid Trump 2.0 trade tensions is energy. Although TSX energy stocks have underperformed the TSX on a price return basis over the last 12 months, they have easily outperformed the S&P 500 in the same period. Also, their trailing 12-month price performance has been better than that of the TSX in a typical year.
Why have TSX energy stocks done so well in the last 12 months?
In this case, it’s not because of tariff immunity. Canadian supplies of oil to the United States are classified as exports; much of Canadian oil companies’ profits come from exports; and U.S. oil exports are taxed at 10%.
However, Canadian oil companies have delivered surprisingly good earnings results in the last 12 months. Suncor Energy, for example, eked out modest 2.8% earnings growth in the trailing 12-month period, despite declining revenue and oil prices. The earnings growth was strong despite a terrible revenue performance because the company’s operations became more efficient. This year, with oil prices rising, the results could be even better.
Foolish bottom line
Trade tensions can be scary, particularly when they are between you and your largest trading partner. Still, they aren’t the end of the world. Trade lost in one place can be made up for elsewhere, and with Canada opening itself up both internally and externally, the future looks bright.
