Two Stocks Poised to Outperform in a Tariff-Heavy Global Economy

As global trade tensions escalate and tariffs become a常态化 tool for economic leverage, investors are increasingly seeking companies that can thrive in—or even profit from—a protectionist landscape. While tariffs disrupt global supply chains and hurt industries reliant on imported goods, they also create opportunities for businesses with robust domestic production, reduced foreign competition, and the ability to capitalize on reshoring trends. In this analysis, we identify two stocks—US Steel (X) and Deere & Company (DE)—that are strategically positioned to benefit from a tariff-heavy environment, supported by historical performance and structural advantages.

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1. US Steel (X): A Domestic Steel Giant in a Protected Market

US Steel, a leading domestic producer of flat-rolled and tubular steel products, stands to gain significantly from tariffs on imported steel. When the Trump administration imposed Section 232 tariffs in 2018—levying 25% duties on imported steel—the company’s stock surged from $20 to over $40 per share in just months, as foreign competition dwindled and domestic pricing power improved.

The chart reveals a sharp spike in early 2018, coinciding with tariff implementation, followed by sustained growth as the company renegotiated contracts and optimized production. While the stock has faced volatility due to macroeconomic pressures, its long-term performance during tariff-friendly eras underscores its resilience.

Why Now?
- Reduced Foreign Competition: Global steel imports to the U.S. dropped by 18% in 2018 after tariffs, allowing domestic producers like US Steel to reclaim market share.
- Infrastructure Spending: Federal initiatives like the $1.2 trillion bipartisan infrastructure bill (2021) boost demand for steel in construction and manufacturing.
- Cost Advantages: US Steel’s vertically integrated operations and proximity to key markets reduce logistical risks compared to distant competitors.

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2. Deere & Company (DE): Dominating Agricultural Machinery Amid Trade Barriers

Deere, the world’s largest agricultural machinery manufacturer, benefits from tariffs that shield its products from cheaper imports. When the U.S. imposed retaliatory tariffs on Chinese agricultural imports during the 2018 trade war, domestic farmers faced pressure to boost efficiency—sparking a demand surge for Deere’s tractors and harvesters.

The stock rose from $140 to over $370 per share between 2018 and 2022, outperforming the S&P 500 by a margin of 85% during the same period. Even as global trade tensions cooled, Deere’s focus on U.S. manufacturing and its 70% domestic sales reliance insulated it from foreign headwinds.

Why Now?
- Tariff-Driven Demand: High tariffs on Chinese-made agricultural machinery (e.g., 25% in 2018) redirected demand toward Deere’s U.S.-produced equipment.
- Rural Resilience: Deere’s customer base—U.S. farmers—benefit from domestic subsidies and trade policies that prioritize food security, driving reinvestment in high-end machinery.
- Technological Leadership: Deere’s autonomous tractors and precision agriculture tools position it to capture premium pricing in a fragmented market.

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Conclusion: Betting on Resilience in a Fractured Economy

Both US Steel and Deere exemplify the “reshoring” trend, where companies benefit from reduced foreign competition and domestic demand. Historical data confirms their outperformance during tariff-heavy periods:

• US Steel saw 100% stock growth in 2018–2019 compared to the S&P 500’s 35% gain.
• Deere’s revenue grew by 12% annually from 2018 to 2022, even as global trade volumes stagnated.

Investors should note that tariffs are not a permanent solution to trade disputes, and geopolitical risks remain. However, these companies’ structural advantages—deep domestic roots, reduced supply chain exposure, and pricing power—make them compelling long-term plays in an era of economic nationalism. As trade barriers persist, these stocks are bets on the enduring strength of American manufacturing.