What are tariffs and how do they affect stocks?

Tariffs are taxes imposed on imported goods, making them more expensive in the domestic market. In this case, the 50% tariff on Brazilian imports means those products cost 50% more for US buyers. This creates a competitive advantage for companies that produce similar goods in the US or import from non-tariffed countries. For investors, this can boost the profitability of these advantaged companies as they gain market share and potentially raise prices, which is why the stocks in this group were selected.

Why would a 50% tariff on Brazilian goods help US steel companies?

Brazil is one of the world's largest steel exporters, and the US is a major buyer of Brazilian steel. When a 50% tariff is applied, Brazilian steel becomes much more expensive for US customers. This gives US steel producers like Nucor and US Steel a significant pricing advantage, as their products are now relatively cheaper compared to Brazilian imports. As a result, these companies can potentially gain market share, increase production, and possibly even raise their prices while still remaining competitive.

How does this tariff situation affect coffee-related stocks?

Brazil is the world's largest coffee producer and exporter. With a 50% tariff, Brazilian coffee beans become substantially more expensive for US coffee companies. This benefits companies like Starbucks, Keurig Dr Pepper, and JM Smucker that have diverse global sourcing networks and can shift their purchasing to non-Brazilian origins. These companies can maintain more stable prices compared to competitors who heavily rely on Brazilian coffee, giving them a potential competitive advantage and protecting their profit margins.

What is "market share" and why does it matter for these stocks?

Market share refers to the portion of total sales in an industry that a company captures. When Brazilian imports become 50% more expensive due to the tariff, US buyers look for alternatives. Companies that offer similar products without the tariff penalty can "capture market share" by attracting these customers. This matters for stocks because increased market share typically leads to higher sales volume, stronger pricing power, and better economies of scale—all of which can boost profitability and, potentially, stock performance.

What does "Projected Profit" mean in the stock data?

Projected Profit refers to the estimated future earnings that analysts expect a company to generate. This forward-looking measure helps investors understand a company's potential financial performance. For the companies in this tariff-focused group, projected profits may be particularly important as they could reflect analysts' expectations of how much these businesses might benefit from the competitive advantage created by the 50% tariff on Brazilian competitors.

16 handpicked stocks

US-Brazil Tariff Tremors

This carefully selected group of stocks represents companies positioned to benefit from the new 50% tariff on Brazilian imports. Our professional analysts have identified non-Brazilian businesses across steel, agriculture, coffee, and aerospace that are ready to capture market share as competitors' goods become prohibitively expensive.

Han Tan | Market Analyst

Updated 2 days ago | Published at juillet 11