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3 Stocks That Could Suffer With Canadian Tariffs

Stock Target Advisor News - Stock Target Advisor - Wed Feb 19, 5:44AM CST

The ongoing trade tensions between the United States and Canada have put several U.S. companies at risk. With Canada considering new tariffs in response to American trade policies, key sectors such as consumer goods, construction, and energy could face increased costs and reduced market access.

Below, we analyze three U.S. stocks that could suffer due to Canadian tariffs, with insights from the Stock Target Advisor.

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1. Molson Coors Beverage Company:

As one of the largest beverage manufacturers in North America, Molson Coors Beverage Company relies heavily on cross-border trade for ingredients and finished products.

Any tariffs on beer imports or agricultural products like barley and aluminum (used in packaging) could raise costs, forcing the company to either absorb expenses or pass them on to consumers.

Impact of Canadian Tariffs

Molson Coors is vulnerable to tariffs on aluminum cans, packaging materials, and brewing ingredients, which could disrupt supply chains and squeeze margins. Increased costs on these essentials could negatively affect its stock performance.

2. DR Horton Inc (DHI):

DR Horton Inc (DHI), a leading U.S. home construction company, could suffer from tariffs on lumber and building materials, as Canada is a key supplier of softwood lumber to the U.S.

The homebuilding sector already faces inflationary pressures, and new tariffs could drive up housing costs, reducing demand and profitability.

The U.S. and Canada have a long history of disputes over softwood lumber tariffs, and higher costs for essential building materials could slow down new home construction, impacting DR Horton’s bottom line.

If housing affordability declines further, demand could weaken, making it difficult for DHI to maintain revenue growth.

3. Enbridge Inc (ENB)

As one of North America’s largest pipeline operators, Enbridge Inc (ENB) depends on the cross-border flow of oil and gas between Canada and the U.S. Any tariffs on energy transportation services or restrictions on pipeline projects could reduce export demand and hurt the company’s revenue stream.

If Canada imposes new restrictions or tariffs related to oil and gas transportation, Enbridge may face lower revenues, increased regulatory hurdles, and decreased investor confidence. Given the company’s already weak earnings growth, this could further strain its financial outlook.

Conclusion:

With trade tensions rising, investors should closely monitor stocks exposed to Canadian tariffs. Companies in consumer goods, housing, and energy are particularly vulnerable, as tariffs could increase operating costs and reduce demand. Diversification and risk management strategies may help mitigate potential losses.

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