When Donald Trump slapped 50% tariffs on certain Canadian imports, Canada slapped back with “dollar-for-dollar” retaliatory tariffs. 700 U.S. products just got more expensive, from dairy products to sports equipment to steel, aluminum, lumber, and automobiles. Already high oil and gas prices have been driving Canada’s inflation to 3.0% in July 2026, hitting the upper ceiling of the Bank of Canada’s 1–3% range. The new tariffs will add to inflation, pushing consumers towards Canadian goods.
While the tariff war is surely attracting media attention, the two nations have been quietly keeping tariffs away from goods that matter most to them.
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Which stocks win in a tariff war?
The retaliatory tariff list excluded oil and gas and artificial intelligence (AI) infrastructure components like Ethernet switches and server racks. This hints that these segments can act as a hedge against tariffs. If you study the trend, U.S. president Donald Trump only threatens tariffs on imports where they can protect American companies.
Back in 2025, when the U.S. imposed a 10% tariff on Canadian energy stocks, it pulled oil prices down to US$60/barrel. We all know Trump loves oil and will do anything to keep oil prices elevated, as he plays into the strength of the petrodollar. Towards the end of 2025, an oil supply glut pulled oil prices down, but the Venezuela oil crisis and the U.S.-Iran war in early 2026 pushed up oil prices. The war has destroyed significant oil refining capacity, hinting that the high oil prices will last for some years.
Canadian energy stocks to keep holding
Suncor Energy (TSX: SU) and Canadian Natural Resources (TSX: CNQ) will continue to benefit from high oil prices. They remain hedged against tariffs. As Canada’s largest oil-producing companies, they have a cost advantage and are in a unique position. The Western Texas region houses refining capacity for heavy, sour crude oil found in Alberta.
The United States produces light crude. So, even if it increases shale production, it cannot refine that oil and has to depend on Canada for its oil consumption. This mismatch in oil production and refining capacity creates energy interdependence. Tariffs and rising oil prices are already fueling inflation in the United States, and imposing tariffs on Canadian oil could push inflation to unbearable levels.
If the United States is keeping its tariff claws off Canadian oil exports, why is Canada building new export markets for its oil and gas? The US capture of Venezuela’s oil reserves poses a long-term threat to Canada, as Venezuelan oil is also heavy crude. However, Venezuela lacks energy infrastructure. By the time that infrastructure is built, Canada will build new pipelines and make Suncor and Canadian Natural Resources’s production available to Europe and Asia. The two companies will benefit from Trump’s tariffs directly and indirectly.
Among all oil companies, I prefer the above stocks as they are the largest and have a strong cost advantage. Oil companies run on a tight financial rope as oil prices can range between US$50 and US$100. Thus, it is imperative for oil companies to have financial discipline to fund operations, pay dividends, and service debt at both price points.
The AI TSX that wins
While Trump targeted Bombardier in his latest round of tariffs, he stayed away from original design manufacturer (ODM) Celestica (TSX: CLS). Celestica has large order books from Google, Advanced Micro Devices, and OpenAI. The ODM’s specialty is designing and testing components for a particular task. For instance, the 1.6 terabit Ethernet switch that it has started initial production for is not something every ODM will do. It is building components specifically for AMD’s Helios, Google’s Tensor Processing Unit, and OpenAI’s custom chip.
Already, AI infrastructure is expensive to build; imposing tariffs on AI infrastructure components could create uncertainty around future investments. I have been bullish on Celestica as it is building design and manufacturing capabilities in the United States and Taiwan. The second half of 2026 and all of 2027 will see hyperscaler ODM orders materialize into revenue. ODM products have higher profit margins and help Celestica charge a premium.
In the tariff war, energy and AI are the true winners, avoiding a global recession.
