We’re just a few weeks into Trump’s second term, and already we’re seeing a major trade war erupting. But believe it or not, this trade war can actually work to YOUR BENEFIT as an investor!
Let me explain…
In just the last few weeks, we’ve seen threats of new tariffs against Mexico and Canada (though there’s currently a short-term reprieve for negotiations), plus a fresh set of tariffs on imported steel. Investors are scrambling to adjust their portfolios, sending some stocks higher and others lower.
But here’s the thing…
Some stocks can actually BENEFIT from this environment. That’s because tariffs and trade war posturing are specifically intended to enrich U.S. companies. So stocks that do most of their business right here at home can not only sidestep the turbulence – they can actually thrive!
Let’s look at three stocks that should benefit from this trade war environment…
An American Steel Producer Ready to Surge
One of the names I’m most excited about right now is Steel Dynamics (STLD). This American company, headquartered in Fort Wayne, Indiana, is perfectly positioned to benefit from “Buy American” requirements in U.S. infrastructure projects.
What makes STLD particularly interesting is their manufacturing approach. Instead of traditional blast furnaces, they use an “electric arc furnace” method to manufacture steel from scrap. This approach isn’t just more environmentally friendly – it’s also more cost-efficient.
The stock currently trades for about 11 times expected profits and pays a 1.4% dividend yield. That’s a very reasonable price for a company that could see significant growth as trade restrictions boost demand for domestic steel.
Drilling for Profits
Next up is Baker Hughes (BKR), an energy service company based in Texas. Trump has already been vocal about his “drill-baby-drill” policy, and trade wars could disrupt oil imports from other countries – creating an even stronger push for U.S. energy independence.
Here’s what’s interesting about Baker Hughes: Even if increased drilling drives oil prices lower, BKR still wins. That’s because they supply the equipment, pipelines, labor, and expertise that oil and gas producers need. More drilling activity means more demand for their services, regardless of the price of oil.
Business is already strong, and the stock is in a clear upward trend.
(Full Disclosure: I have a personal position in BKR as part of my portfolio.)
A Regional Bank Without the International Headaches
Finally, take a look at Truist Financial (TFC), a regional bank with very little international exposure. As investors get nervous about international tensions, they’re likely to allocate more capital to areas of the market that don’t have overseas exposure.
We’re already seeing regional bank stocks trending higher, and the pro-business culture in Washington should help drive small business formation. That’s great news for regional banks like TFC that focus on domestic lending.
The Bottom Line
While trade wars can create market uncertainty, they also create opportunities for investors who know where to look. The key is focusing on companies that primarily do business here in the U.S. and are positioned to benefit from protectionist policies.
Make sure you keep these “trade war winners” on your short watch list!
Here’s to growing and protecting your wealth!
Zach
P.S. If you want to see the most aggressive trades I’m making in my own account, be sure to check out my Speculative Trading Program! Members get real-time notifications for every buy and sell I make!