What are protectionist policies and how do they affect stocks?

Protectionist policies are government measures designed to shield domestic industries from foreign competition. These typically include tariffs (taxes on imported goods), quotas, and other trade barriers. For stocks, these policies can create winners and losers: companies that produce goods domestically may benefit from reduced foreign competition and higher pricing power, while companies that rely heavily on global supply chains or international sales might face increased costs and market challenges.

What is the IMF and why does their outlook matter for these stocks?

The IMF (International Monetary Fund) is a global organization that works to foster economic stability and growth. Their economic forecasts are widely respected indicators of global economic trends. When the IMF signals concerns about trade barriers slowing global growth, it suggests an environment where domestically-focused companies might outperform those with significant international exposure. These forecasts help investors understand potential shifts in economic conditions that could affect stock performance.

Why focus on steel companies in this stock group?

Steel producers feature prominently in this group because they're often among the first and most direct beneficiaries of protectionist policies. When tariffs are placed on foreign steel, domestic producers like Nucor and US Steel can charge higher prices without losing business to cheaper imports. Additionally, steel is considered strategically important for national security and infrastructure, making it a frequent target for trade protection measures.

What does "onshoring" mean in the context of these stocks?

Onshoring refers to the process of bringing manufacturing and production back to the domestic market (in this case, the United States) after previously moving operations overseas. Rising trade barriers, supply chain disruptions, and national security concerns have accelerated this trend. Companies that facilitate onshoring or have maintained strong domestic production capabilities stand to benefit as more businesses seek to reduce their dependency on international suppliers.

What is a dividend yield and why is it listed for these stocks?

Dividend yield is the annual dividend payment expressed as a percentage of the current share price. For example, if a $100 stock pays $3 in dividends per year, its dividend yield is 3%. Many companies in this group are established manufacturers that may pay regular dividends to shareholders. The dividend yield helps investors understand the income component of these stocks, which can be particularly attractive during periods of market uncertainty brought on by changing trade policies.

15 handpicked stocks

The Protectionist Pivot

A carefully selected group of US companies positioned to benefit from rising trade barriers and tariffs. These stocks represent businesses with strong domestic operations that may gain advantages as protectionist policies reshape global trade.

Han Tan | Market Analyst

Updated 2 days ago | Published at juillet 2