Resilient Investment Opportunities During Trade Tensions
A central tool in global trade policy, tariffs are taxes or duties imposed on imported or exported goods. Tariffs influence global trade policies, often shaping economic relations between different nations, and may be implemented to help protect domestic industries or generate government revenue.(1)
The US imposed tariffs on steel and aluminum imports in 2018 with the goal of protecting local producers. While demand for US-made steel increased, it raised costs for the industries that relied on steel, such as automotives and construction, and led to retaliatory tariffs from US trade partners.(1)
The recent developments between the US and China trade relations and broader global economic shifts have prompted renewed debate about the effectiveness and consequences of tariffs.(1)
Globalization and economic interdependence means that tariffs, even when intended to bolster domestic industries, may have mixed and sometimes unanticipated consequences.(1)
Let’s explore some potentially resilient investment opportunities to help navigate periods of increased trade tensions and market volatility.
Industries That May Be Less Likely to Be Affected by US Tariffs
Healthcare and Pharmaceuticals
Healthcare and pharmaceutical products and supplies are often domestically produced or exempt from tariffs. Many medical devices and pharmaceuticals are manufactured in the US or within trade agreements that protect them from heavy tariffs.(1)
While some supplies may be imported, they are deemed essential, which has led governments to exempt them from tariffs to avoid excessive disruption to the healthcare system.(1)
Digital Products and Software
Digital products and services, such as software, cloud services, and digital platforms, are not typically subject to traditional tariff regulations that affect physical goods. Unless data localization laws or digital service taxes arise, digital-focused areas may remain comparatively shielded and more flexible to trade barriers.(1)
However, it’s important to note segments of the technology sector that rely on physical components, such as hardware manufacturers and electronics makers, are more vulnerable to tariffs on imported goods.(1)
Consumer Staples: Groceries and Utilities
Grocers and utility companies may be slightly more stable than other industries in the face of tariffs.(2)
Although retail and energy costs are still affected by tariffs and supply chain disruptions, the necessity of consumer staples makes them more likely to remain more resilient than other sectors.(2)
Article Sources:
(1) “The Impact of US Tariffs: Which Industries Are Most and Least Affected.” IBISWorld, 31 October, 2024, https://www.ibisworld.com/blog/us-tariffs/1/1127/. Accessed April 22, 2025.
(2) Jones, Alexandra Mae. “As tariffs roil the markets, here's why some sectors are faring worse than others.” CBC, April 8, 2025, https://www.cbc.ca/news/business/market-sectors-tariffs-1.7504207. Accessed April 24, 2025.