President Donald Trump is again threatening to slap Canada and Mexico with tariffs over issues at the border. The U.S. President claims the two countries haven’t done enough to stem the flow of dangerous drugs, such as fentanyl, into the U.S. As a result, he will place 10% tariffs on Canada and Mexico on March 4.
President Trump already delayed plans to put tariffs on Canada and Mexico earlier in February. That delay was allowed as both countries made commitments to tackle issues at the border. Canada’s Public Safety Minister David McGuinty claims that enough has been done on its part to tackle illegal drugs crossing the border but President Trump seems to disagree.
The President is also considering reciprocal tariffs on countries taxing U.S. exports. That could include much of Europe as President Trump views its value-added taxes as a form of tariffs. A study of tariffs on the U.S. will be completed by April 1 and Trump will announce his tariff reciprocal plans by April 4.
China Faces Additional Trump Tariffs
President Trump also doesn’t plan to cut China any slack with plans to introduce another 10% tariff on the country. This comes after he already hit China with a 10% tariff. This further accelerates the trade war between the U.S. and China as economists expect the latter to remain resilient against Trump’s tariffs.
How to Play the Stock Market During a Trade War
President Trump’s tariffs increase the cost of goods made overseas. As such, investors will likely benefit from buying shares of companies largely immune to these tariffs. Beverage companies, such as Coca-Cola (KO) and Pepsi (PEP), healthcare companies, including Eli Lilly (LLY) and Merck (MRK), and streaming services like Netflix (NFLX) and Spotify (SPOT) are well positioned to avoid the effect of Trump’s tariffs.
