What are tariffs and how do they affect stocks?

Tariffs are taxes imposed on imported goods, making them more expensive compared to domestic alternatives. In this case, the 35% tariff on Canadian goods means U.S. companies face less foreign competition and can potentially raise prices or gain market share. This typically benefits domestic manufacturers in the affected industries (like steel and aluminum producers in this theme) by giving them a price advantage over their Canadian competitors.

Why are steel and aluminum companies featured prominently in this theme?

Steel and aluminum companies make up the majority of this theme because they're directly affected by the tariffs. These industries have historically faced significant competition from Canadian imports. When those imports become 35% more expensive due to tariffs, U.S. producers can sell their products at more competitive prices relative to the now-expensive Canadian alternatives. This can lead to increased market share, higher sales volumes, and potentially better profit margins.

What does "pricing power" mean for these companies?

Pricing power refers to a company's ability to raise prices without losing customers. With the 35% tariff on Canadian goods, U.S. manufacturers in this theme gain pricing power because their Canadian competitors must now charge significantly more. This means the U.S. companies can potentially raise their own prices (though likely less than 35%) and still remain more affordable than the tariff-affected imports, potentially increasing their profit margins while maintaining or growing their customer base.

What is protectionism and why does it matter for these stocks?

Protectionism refers to government policies designed to shield domestic industries from foreign competition, typically through tariffs, quota restrictions, or subsidies. In this case, the 35% tariff on Canadian goods is a protectionist measure aimed at giving U.S. companies an advantage. For the stocks in this theme, protectionism matters because it creates a more favorable competitive environment where they face less pressure from lower-priced imports, potentially allowing them to expand their market share and improve profitability.

What risks should I consider with this investment theme?

Key risks include potential policy reversals (tariffs can be changed or eliminated with new administrations), retaliatory tariffs from Canada that might harm U.S. companies with international operations, higher input costs for industries that rely on Canadian materials, and market adjustments as supply chains reorganize. Additionally, if U.S. companies raise prices significantly, it could reduce demand for their products. Finally, tariffs can contribute to broader inflation that might trigger interest rate increases, potentially affecting stock valuations across the market.

11 handpicked stocks

U.S. Protectionism: American Advantage

This carefully selected group of stocks represents companies set to benefit from the new 35% tariff on Canadian imports. Our professional analysts have identified these U.S. businesses as being uniquely positioned to capture greater market share and increase their pricing power as foreign competition becomes more expensive.

Han Tan | Market Analyst

Published on July 14

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Nucor Corporation

NUE

Current price

$138.71

As the largest US steel producer, Nucor is well-positioned to gain market share from more expensive Canadian steel imports.

Steel Dynamics Inc.

STLD

Current price

$144.39

This domestic steel producer and recycler will face less competition from Canadian steel imports, supporting its pricing power.

Cliffs Natural Resources Inc.

CLF

Current price

$12.70

As a vertically integrated steel producer focused on the auto industry, it benefits from tariffs on both steel and auto parts from Canada.

TimkenSteel Corp

MTUS

Current price

$16.92

Commercial Metals Company

CMC

Current price

$58.65

Reliance Steel & Aluminum Co.

Current price

$285.60

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

≈

In 12 months it might be worth:

$1,000.00

+13.38%

≈

About This Group of Stocks

Our Expert Thinking

These stocks represent a tactical play on a major shift in U.S. trade policy. As Canadian imports become 35% more expensive, domestic manufacturers of steel, aluminum, and industrial products are gaining a significant competitive edge, potentially boosting their revenue and profits without facing these new import costs.

What You Need to Know

This is an event-driven investment opportunity based on a specific government policy change. The companies in this group are primarily materials producers and processors that supply critical components to construction, automotive, and manufacturing industries—all sectors where domestic production now has a clear price advantage.

Why These Stocks

Each company was selected because its core operations are based in the United States, effectively shielding them from the new import duties. These businesses are directly positioned to capture market share from Canadian competitors and potentially raise prices as imports become more expensive.

Group Performance Snapshot

13.38%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 13.38% over the next year.

7 of 11

Stocks Rated Buy by Analysts

7 of 11 assets in this group are rated Buy by professional analysts.

1.4%

Group Growth

This group averaged a 1.4% return last month.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🛡️

Protected by Policy

These companies just got a major advantage from the government. With the new 35% tariff on Canadian imports, U.S. manufacturers can raise prices and expand market share without facing the same overseas competition.

🏭

Made in America Momentum

As Canadian goods become significantly more expensive, companies producing steel, aluminum, and industrial products within U.S. borders are suddenly in a much stronger position to compete and grow.

💰

Pricing Power Potential

When competition gets hit with a 35% tariff, domestic producers gain incredible flexibility to optimize their prices. This could translate directly into higher profit margins for these U.S. manufacturers.

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