Investing.com — Logistics and shipping companies with exposure to North American trade are likely to see limited impact from President-elect Donald Trump's plans for more trade tariffs, Stifel analysts said in a recent note.
But the brokerage sees risks for shipping companies heading east and across the Pacific, given Trump's pledge to tighten trade scrutiny against several Asian economies, especially China.
Trump has pledged to impose tariffs from “Day One” of his presidency, and is scheduled to take office next week on January 20.
The tariffs are expected to impact global shipping demand, which will likely herald higher shipping costs that will be passed on to consumers, Stifel said.
China is expected to be most affected by this trend, as trade flows from China are likely to decline further in the coming years, which will hurt the country's already faltering economy. Trump also threatened to target imports from Canada and Mexico.
But Stifel analysts said tariffs on Canada and Mexico are “unlikely to last,” given that the U.S. manufacturing industry still relies heavily on materials from the two countries.
The brokerage offered a positive view on domestic and North American freight providers, and saw increased risks for companies doing business with China and the East.
“We believe that domestic manufacturing capacity in the United States either cannot, or will take a very long time, to replace existing capacity abroad, and this is almost a zero-sum game; in short: things have to come from somewhere.
Among individual stocks, Stifel said he saw a suitable setup for GXO Logistics Services Inc (NYSE:) after a weak 2025.
FedEx Corporation (NYSE:) and United Parcel Service Inc (NYSE:) is expected to see an increase in risk due to its international exposure.
But the brokerage firm pointed to the potential for increased “convergence,” the practice of engaging in trade with geographically closer countries to offset increases in costs.
Aside from GXO, Stifel said UPS and CSX (NASDAQ:) are also likely to benefit from increased near-haul transportation. The brokerage has buy ratings on all three stocks.
