When trade tensions rise, investors seek out the stocks that can provide some defensive appeal to offset that market volatility. Often, these stocks can continue to offer growth, even when the market gets choppy. That means picking companies that can offer strong essential demand and recurring, stable revenue streams, over more volatile picks.
Trade tensions often create volatility in supply chains, impact commodity prices, and tend to influence corporate spending. And while not every company is exposed equally, there are some that can benefit from that volatility.
Trade tensions also tend to amplify supply‑chain bottlenecks, which can create uneven performance across sectors and highlight the value of those companies with stable demand.
So then, what are the stocks that offer that defensive appeal needed and thus an opportunity? Several great options on the market can meet that goal, and here’s a look at four of them.
Source: Getty Images
Option #1: Teck Resources
Teck Resources (TSX:TECK.B) is one of the better-known mining companies in Canada. Teck’s appeal to investors stems from its exposure to certain commodities that are tied to global demand trends.
One of those commodities is copper. Copper is an essential metal used in power grids, construction, manufacturing, and renewable energy transition. Teck also has exposure to steelmaking coal and zinc. The sheer necessity of those metals makes them ideal options for defensive portfolios, even when trade tensions rise.
More importantly, this demand backdrop should continue to support Teck’s earnings even when the market turns unpredictable.
Option #2: Waste Connections
Irrespective of how trade tensions impact the entire market, there are some services that persist with consistency. Waste Connections (TSX:WCN) is the perfect example of that.
Waste Connections provides essential waste management services, which is arguably one of the most stable industries on the market. Its business model is built on recurring revenue, long-term contracts, and steady pricing power.
This steady cash‑flow profile is attractive during periods when the broader market sentiment becomes unpredictable.
These factors make Waste Connections one of the better defensive options to consider amid trade tensions, especially compared to more cyclical sectors. Speaking of defensive appeal, the company’s focus on secondary and exclusive markets bolsters that moat further and reduces competitive pressure.
In short, Waste Connections is a great example of how essential‑services companies can anchor a portfolio with defensive appeal.
Option #3: Fairfax Financial
Fairfax Financial (TSX:FFH) is the third option for investors looking to navigate volatile markets stemming from trade tensions. Fairfax has built a reputation around that stability, primarily through its insurance operations and disciplined investment approach.
The company’s diversified insurance operations generate consistent underwriting income, while its investment strategy protects capital during periods of uncertainty.
Fairfax has historically positioned itself conservatively when risks rise, giving it the flexibility to take advantage of opportunities when markets eventually stabilize. This makes Fairfax a stabilizing presence in a market full of uncertainties and trade tensions.
Option #4: Nutrien
Wrapping up the list of stocks that persist through trade tensions is Nutrien (TSX:NTR).
Nutrien is a key global player in agriculture, supplying potash, nitrogen, and phosphate products. Those products support crop production worldwide, making Nutrien a defensive pick.
Food security concerns often intensify during periods of trade tension. Nutrien’s global distribution network and scale give it a strong competitive position as countries work to secure stable agricultural inputs.
Even when trade dynamics shift, demand for crop nutrients tends to remain steady, helping Nutrien maintain its important role across market cycles.
These TSX stocks will outlast trade tensions
No stock, even the most defensive, is immune to risk. Fortunately, the four stocks mentioned above represent a well-diversified mix of options from different sectors of the market.
In my opinion, one or all of these stocks should be a small position in a larger, well-diversified portfolio.
