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Globe and Mail
22-05-2025
- Business
- Globe and Mail
3 American Companies Investors Need to Know Amid Trump's Tariff Wars
It's difficult to predict precisely what the tariff landscape will look like when the dust settles on the trade conflict, but we can say some things with a high degree of certainty. The current U.S. administration is serious about improving trading conditions for American companies and workers. That counts for both exporters and American companies competing domestically. In addition, President Trump is trying to encourage self-sufficiency in energy and key minerals and metals. That's great news for companies like Freeport-McMoran (NYSE: FCX), Whirlpool (NYSE: WHR), and Cheniere Energy (NYSE: LNG). Here's why. Freeport-McMoran: Helping secure a critical metal for the U.S. The miner dominates the domestic copper market. It provides 70% of the domestically sourced copper for U.S. refined production. That said, the U.S. imports 45% of its refined copper consumption. If the U.S. is going to reduce its dependency on foreign refined copper, Freeport-McMoran will play a significant role. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » There's increasing support for such an approach, with the U.S. Chamber of Commerce writing to the Commerce Department advocating for copper to be included in the list of critical metals and to receive tax credits under the existing section 45X tax credits, and for immediate action to encourage minerals and metals production in the U.S. The good news is Freeport-McMoran is ideally placed to meet domestic demand with potential brownfield projects in Bagdad and Lone Star, Arizona, as well as an exciting leaching initiative to extract copper from existing U.S. stockpiles. In addition, President Trump has requested an investigation of copper imports, which could lead to tariffs on them. The mere threat of tariffs has encouraged the market to pay a premium for U.S. copper of around 13%. Freeport's management estimates that this premium were to remain through the year, it would lead to an $800 million "bottom line" financial benefit. If a tariff of, say, 25% is imposed, Freeport will benefit even more. While none of these events can be guaranteed, the current administration is biased toward supporting investment in copper and domestic provision of it, which is highly likely to improve Freeport-McMoran's profitability. Whirlpool: Evening out the playing field Appliance maker Whirlpool trades with a massive dividend yield, but its $380 million dividend may not prove sustainable if current market pressures persist. Persistently high interest rates continue to pressure the housing market and, in turn, higher-margin discretionary purchases of domestic appliances. Moreover, its competitive position was hit in late 2024 and early 2025 as Asian competitors pushed through imports to the U.S. in anticipation of tariffs. In addition, the pause on tariffs recently announced with China may encourage more near-term imports. With $4.8 billion in long-term debt, and its forecast for $500 million to $600 million in free cash flow (FCF) in doubt, Whirlpool's dividend payout is already questionable. That said, management believes the company will be a net winner from tariffs, not least if the administration closes a loophole that allows Asian competitors not to pay tariffs on the Chinese steel they use in their products. This would result in a $70-per-product cost disadvantage (and a $150 difference in the retail margin) for Whirlpool on large major appliances such as washing machines. On the last earnings call, CEO Marc Bitzer said he had "a high degree of confidence that the new administration will close these loopholes." That would be a significant win for Whirlpool, and if management decides to reset investor expectations, possibly after a dividend cut, Whirlpool could be an excellent stock to invest in. Cheniere Energy: Exporting U.S. energy The Biden administration paused approvals for applications to export liquefied natural gas (LNG) from new projects in 2024. The Trump administration immediately ordered their resumption upon taking office. The difference is stark, and it's good news for Cheniere Energy, the largest LNG producer in the U.S. The company owns a 48.6% stake in Cheniere Energy Partners (owners of the major LNG terminal in Sabine Pass, Louisiana). In addition, Cheniere Energy owns the Corpus Christi LNG Terminal in Texas, which it continues to invest in to expand capacity. The company's business model involves purchasing natural gas in the North American market (which the Trump administration wants to encourage) and processing it into LNG for export worldwide. Again, it's no secret that President Trump is actively promoting LNG exports around the globe. Stocks to buy The point of tariffs is to improve U.S. companies' competitive positioning, whether domestically or in international markets. However, the current administration can also do this by encouraging investment in copper, closing loopholes that hurt Whirlpool's competitive positioning, and encouraging LNG investment and export markets. If these things happen, the stocks discussed above will be long-term winners. Should you invest $1,000 in Freeport-McMoRan right now? Before you buy stock in Freeport-McMoRan, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Freeport-McMoRan wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor 's total average return is975% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Reuters
19-05-2025
- Business
- Reuters
Breakingviews - The post-truce state of US-China trade looks dire
HONG KONG, May 19 (Reuters Breakingviews) - Markets appear to be writing off the latest Sino-American trade conflict as quickly as they priced it in. China's benchmark CSI 300 index (.CSI300), opens new tab is up 1.4% this year, marking a full recovery from its sharp drop in early April after President Donald Trump announced a 34% reciprocal tariff on Chinese goods, which swiftly spiralled into triple-digit retaliatory levies. The latter has been cancelled and the former suspended for 90 days, leaving the official reciprocal charge at 10%, level with other countries. In reality, it's much higher. Beijing's burden was already heavier, having started out Trump's second term with effective tariffs of roughly 11% incurred during his previous trade war. Almost immediately, the White House then slapped another 20% on Chinese goods, citing concerns over fentanyl. That, stacked atop the other blanket levies, brings the country's total to more than 40%. The administration did carve out some exemptions for smartphones, computers and other electronics. Factor in both those but also new global tariffs on products like steel, and the effective rate is almost 32%, per Fitch. That's far higher than the global average of about 13%, the rating agency estimates. Optimists may take heart from the speed with which Beijing and Washington scrapped the retaliatory levies. So far, though, aside from a modest and preliminary pact with the UK, there is little indication that U.S. discussions with its other trading partners are yielding much real progress ahead of their 90-day deadline in early July. Worse, the electronics carve-out on April 13 was followed the next day by a national security probe into semiconductor imports. If that ends up shrinking the loophole and pushing the effective rate on China higher, it will complicate already fraught trade talks. Those with skin in the game don't expect a quick deal restoring the status quo ante. Apple (AAPL.O), opens new tab intends to shift production of most U.S.-bound iPhones to India, Reuters reported last month. Last week, Allan Wong, CEO of Hong Kong's Vtech ( opens new tab — one of the world's largest toymakers and a supplier for Walmart (WMT.N), opens new tab — told the Financial Times that he planned to shift all production for the U.S. market out of China by the end of next year. Other manufacturers previously battered by protracted uncertainty during Trump's 2018-2020 trade war are planning similar moves, Nikkei and others have reported. Traders may be betting on a quick resolution, but that's at odds with the dire situation on the ground. Follow @KangHexin on X CONTEXT NEWS The effective U.S. tariff rate on imports from China currently stands at 31.8%, per a report from ratings agency Fitch on May 13, the highest of any trading partner. That's after President Donald Trump's administration on May 12 suspended for 90 days the 34% U.S. reciprocal tariff on goods from the People's Republic and cancelled triple-digit retaliatory levies imposed last month. The White House exempted smartphones, computers and some other electronics from reciprocal tariffs on April 13, but opened a national security probe into semiconductor imports the following day. Allan Wong, CEO of Hong Kong-based VTech, one of the world's largest toymakers and supplier for Walmart, told the Financial Times on May 14 that despite the trade truce his company planned to shift all production for the American market out of China by the end of 2026.
Bloomberg
13-05-2025
- Business
- Bloomberg
Goldman, JPMorgan Lift China Growth Outlook on US Tariff Truce
Goldman Sachs Group Inc. and other major banks boosted their growth forecasts for China's economy, citing a temporary deal with the US to de-escalate their trade conflict. The US lender expects real gross domestic product in the world's second-largest economy to rise 4.6% in 2025 from a prior estimate of 4%, analysts led by Andrew Tilton wrote in a research note to clients Tuesday.
