what stocks will do well with tariffs: resilient sectors

What stocks will do well with tariffs

Overview

The question "what stocks will do well with tariffs" asks which publicly traded companies, sectors and exchange-traded products are likely to outperform or be more resilient when trade tariffs rise. This article explains the economic channels by which tariffs affect profits and markets, describes tariff scenarios and typical market reactions, identifies the corporate traits and sectors that tend to fare better, provides representative stocks and ETFs often cited as tariff-resilient, and offers practical screening, portfolio, and hedging ideas for investors. As of 16 January 2026, according to PA Wire reporting, consumer credit stress and changing household behaviour are part of the macro backdrop investors should weigh when assessing tariff risk.

This guide is written in plain language for beginners while including frameworks used by professional analysts. It is informational only and not investment advice. References to research come from public financial press and institutional research.

Key reading outcomes (what you will learn):

• Why tariffs matter for companies and markets.
• Which company traits and sectors are typically insulated or can benefit.
• Practical screening questions and a quick due-diligence checklist.
• Representative stocks and ETFs often discussed as tariff-resistant or tariff-benefit names.
• Tactical approaches and risk-management tools for different tariff severities.

Economic mechanism — how tariffs affect corporate profits and markets

Tariffs are taxes on imports that raise the cost of goods crossing borders. They affect corporate profits and market prices through several direct and indirect channels:

• Input-cost channel: Tariffs increase the cost of imported raw materials, components, or finished goods. Companies that rely on imported inputs can see gross margins compressed unless they can re-source or raise prices.

• Sales channel (demand effect): Tariffs on foreign exports make those goods more expensive in destination markets, reducing unit sales and revenue for exporting firms and for global supply chains reliant on cross-border volumes.

• Pass-through and pricing: Firms with pricing power can pass tariff-driven cost increases to customers; others must absorb costs, cutting margins.

• Supply-chain and operational disruption: Tariffs can trigger supplier re-shoring, longer lead times, higher logistics costs, or the need for alternative sourcing — all of which raise operating complexity and capex.

• Retaliation and trade policy spillovers: Targeted tariffs often prompt reciprocal measures that hit exporters in other sectors or countries, amplifying impact beyond the initial tariff list.

• Macroeconomic effects: Tariffs can raise headline inflation (via higher consumer goods prices) and affect currency levels, interest-rate expectations and consumer confidence, which in turn influence equity valuations.

• Sectoral reallocation: Investors often rotate portfolios toward sectors with lower trade exposure or toward companies that can benefit from import restrictions (for example, domestic producers of previously imported goods).

Direct effects are immediate (higher costs or price changes). Indirect effects — such as slower global growth or higher inflation expectations — can change discount rates and valuation multiples.

Tariff scenarios and market reactions

Tariff regimes vary. Typical scenarios include:

• Sector- or product-specific tariffs: Targeted levies on steel, semiconductors, autos, or agricultural goods. These disproportionately affect certain supply chains.

• Country-specific tariffs: Taxes applied to imports from specific countries; impacts depend on bilateral trade exposure.

• Broad import tariffs: Wide-ranging tariffs that cover many product categories; these are more inflationary and disruptive.

Common market reactions:

• Sector rotation: Materials, industrials and domestic manufacturing names may outperform if tariffs favour local producers; consumer discretionary names that import goods may underperform.

• Increased volatility: Tariff announcements and negotiations create headline risk; implied volatility and the VIX typically rise.

• Defensive bid: Investors often increase allocations to defensive sectors (consumer staples, healthcare, utilities) that rely less on cross-border goods flows.

• FX and commodity moves: Tariff-driven inflation expectations can boost commodity prices or affect the trade-weighted currency, amplifying market swings.

Indicators investors watch:

• Trade policy announcements and regulatory filings.
• Tariff Risk Indexes and commodity price series (steel, copper).
• VIX (equity volatility), trade-weighted dollar and USD pair moves (e.g., USD/CNY, USD/EUR).
• Company disclosures: foreign-revenue share, supplier concentration, and input-cost exposures in 10-K/10-Q filings.

Characteristics of stocks likely to do well with tariffs

When asking what stocks will do well with tariffs, investors often screen for several corporate characteristics. Companies that possess more of these traits tend to be more insulated.

Low foreign-revenue exposure / primarily domestic revenue

Summary: Businesses that earn the bulk of revenue in the home market face less demand disruption from import tariffs or foreign retaliatory duties. For example, domestically focused utilities and local consumer services typically have limited cross-border sales.

Why it helps: Lower reliance on export markets reduces the risk of revenue erosion linked to counter-tariffs or declines in global trade volumes.

Checklist item: percent of revenue derived domestically (from company filings).

Localized supply chain and onshore manufacturing

Summary: Firms with manufacturing close to end markets or diversified nearshore suppliers face smaller incremental tariff costs than companies dependent on long, imported supply chains.

Why it helps: Local sourcing avoids import duties and reduces lead times and re-routing costs.

Checklist item: proportion of inputs sourced domestically or in low-tariff jurisdictions.

Strong pricing power and brand/margin resilience

Summary: Companies that can maintain prices without large demand loss (strong brands, essential products) can pass on tariff-related cost increases to customers.

Why it helps: Pricing power preserves gross margins and earnings even when input costs rise.

Checklist item: historical gross-margin stability and ability to raise prices without big volume declines.

Service- or software-oriented business models

Summary: Firms offering services, subscriptions, cloud software or digital products have limited exposure to physical goods and therefore to tariffs.

Why it helps: Minimal goods-flow exposure means tariffs have little direct impact on cost of goods sold or cross-border logistics.

Checklist item: revenue split service vs. product; dependence on hardware.

Vertical integration, inventory/hedging capabilities

Summary: Companies that control key parts of their supply chain, can build inventories ahead of tariff changes, or hedge FX and commodity risk can reduce immediate tariff impact.

Why it helps: Inventory buffers and hedging soften near-term margin shocks and give management time to adjust sourcing.

Checklist item: inventory days, hedging policies, vertical integration disclosures.

Sectors and industries that tend to outperform or be resilient

While every tariff episode differs, several sectors historically show relative resilience or potential upside under protectionist regimes.

Consumer staples and branded goods

Summary: Food, beverage and household staples with strong brands and localized production often retain stable demand and can pass incremental costs to consumers. Defensive demand for essentials helps.

Why it helps: Stable consumption and pricing power.

Examples: major beverage and household-goods manufacturers (representative names discussed below).

Healthcare and pharmaceuticals

Summary: Healthcare demand is relatively inelastic; many services are domestic; some manufacturing (drugs, devices) is localized or protected by regulation.

Why it helps: Defensive cash flows and lower reliance on cross-border consumer goods demand.

Utilities and regulated/defensive sectors

Summary: Utilities have predictable, contract-backed cash flows and limited goods import exposure, making them less sensitive to tariff-driven swings.

Why it helps: Regulation and steady demand buffer profits.

Software, cloud services, and other services businesses

Summary: Digital and subscription-based firms have low physical trade exposure and often strong recurring revenue.

Why it helps: Tariffs have minimal direct impact; indirect effects come via enterprise IT budgets.

Financials and select domestic banks

Summary: Some banks and financial firms that focus on domestic lending and services can be less directly affected, though they face macro fallout from tariffs through slower loan growth or higher provisioning.

Why it helps: Domestic lending franchises and fee-based services can be defensive.

"Buy‑Domestic" beneficiaries — defense, heavy equipment, semiconductors, critical minerals

Summary: Tariffs and industrial policy that favour domestic manufacturing can lift demand for local defense contractors, heavy-equipment makers, semiconductor fabs and critical-minerals producers.

Why it helps: Procurement rules, subsidies and reshoring incentives shift orders toward local suppliers.

Select industrials and construction-related names

Summary: Companies supplying domestic infrastructure or materials may benefit if tariffs limit foreign competition and spur local sourcing — but effects depend on pass-through to end-users.

Why it helps: Government and private investment in domestic production can generate demand for industrial capital goods.

Example stocks and ETFs often cited as tariff-resilient (illustrative)

Note: the list below is illustrative, drawn from public coverage and institutional screens. It is not a recommendation. All names are examples of the types of businesses investors and analysts commonly cite when asking what stocks will do well with tariffs.

• Coca‑Cola (consumer staples): Global brand with substantial local bottling and distribution; pricing power in many markets helps margin resilience.
• McDonald's (consumer discretionary / restaurants): Localized operations with franchise partners and strong brand pricing power.
• Procter & Gamble (consumer staples): Large portfolio of household brands and diversified manufacturing footprint.
• Nucor (steel producer / materials): Domestic producer that can benefit from tariffs on imported steel depending on demand and input cost dynamics.
• Caterpillar (industrial / heavy equipment): Domestic manufacturing exposure and potential to win more local procurement in protectionist scenarios.
• Nike (apparel/brand): Strong brand with pricing power and diversified manufacturing; impacts depend on sourcing flexibility.
• Best Buy (consumer electronics / retail): Domestic retailer that may see relative advantage if import chores change, but also exposed to consumer spending.
• Duke Energy (utilities): Regulated cash flows and domestic footprint.
• Microsoft (software/cloud): Subscription-based business with minimal physical-goods exposure; resilient revenue model.
• Netflix (media/streaming): Digital distribution with low tariff exposure.

Representative ETFs and thematic funds often used to express tariff-resilient views (examples):

• Broad domestic-focused large-cap ETFs (to tilt away from export-heavy small caps).
• Industry ETFs for steel, industrials or domestic manufacturing (when seeking direct exposure to domestic producers).
• Technology and software ETFs for service/digital exposure.

These names appear in public screens and analyst lists; they are illustrative of the business traits described above rather than investment picks.

Historical case studies and empirical evidence

Tariff episodes provide lessons:

• 2018 U.S. steel and aluminum tariffs: Domestic steel producers initially rose on the expectation of higher local pricing, while downstream manufacturers that used imported steel faced higher input costs. The net effect across the economy was mixed: some producers benefited, others saw margins pressured.

• Solar-panel and washing-machine tariffs: Targeted measures protected some domestic producers but raised prices for installers and consumers, slowing adoption in some markets.

Lessons learned:

• Winners are often concentrated in specific supply-chain positions, not entire sectors.
• Short-term gains for producers can be offset by higher costs for downstream customers, which reduces aggregate demand.
• Retaliation can harm exporters, and currency adjustments can blunt tariff effects over time.

Empirical approach: Researchers compare sector returns, earnings revisions and profit-margin trends before and after tariff announcements to quantify impacts. The distribution of winners and losers tends to be uneven and contingent on company-specific characteristics.

Investment strategies for a high-tariff environment

When considering what stocks will do well with tariffs, investors can follow several tactical and strategic approaches while maintaining risk controls.

Sector rotation and defensive overweighting

Summary: Tilt portfolios toward defensive sectors (consumer staples, healthcare, utilities) and digital/service businesses with low goods exposure.

Tactical note: Rotations should account for valuation and macro risks; defensive sectors may already trade at premiums.

Stock-picking criteria and due diligence

Summary: Use a checklist to screen companies for tariff resilience. Key items include:

• % foreign revenue (lower often better for resilience);
• Manufacturing footprint (onshore vs offshore);
• Supplier concentration and ability to re-source;
• Historical pricing power and margin stability;
• Inventory levels and hedging policies;
• FX exposure and hedging;
• Balance-sheet strength to absorb temporary shocks.

Investors should read 10‑K/10‑Q disclosures, investor-day slides, and management Q&A where tariff risk and sourcing strategies are discussed.

Use of ETFs and thematic plays

Summary: ETFs provide a cost-efficient way to express sector tilts (defensive, domestic manufacturing, software) and diversify idiosyncratic risk.

Pros: Diversification, liquidity, simple implementation. Cons: Broad exposures may include names with hidden tariff vulnerabilities; read ETF holdings before investing.

Hedging and options strategies

Summary: Use options to hedge downside (protective puts) or to express conviction with limited capital (vertical spreads). Volatility products can provide protection during tariff-driven headline risk spikes.

Tactical note: Hedging has a cost; it’s useful to size hedges to portfolio risk and expected event duration.

Rebalancing, time horizon, and risk management

Summary: Distinguish tactical trades (short-term tariff announcements) from strategic portfolio repositioning. Avoid overreacting to headlines; instead, use quantifiable exposure screens and maintain diversification.

Risk management: Limit concentration, set stop-losses where appropriate, and maintain cash or liquid hedges for tactical flexibility.

Risks, caveats, and complexities

Understanding what stocks will do well with tariffs requires acknowledging important caveats:

• Retaliation risk: Tariffs can trigger countermeasures that hurt exporters and global supply chains.

• Inflation and real-demand effects: Tariffs can push consumer prices up, reducing real disposable income and curbing demand for discretionary goods.

• Currency adjustments: Exchange-rate moves can offset some tariff impacts over time.

• Within-sector variation: Not all names in a sector react the same — company-level exposures and management responses matter.

• Policy uncertainty: Tariff policy can shift quickly, so timing and duration of exposures matter.

• Macroeconomic backdrop: As reported by PA Wire on 16 January 2026, rising consumer credit stress and changing household behaviour are current risks that can interact with tariff effects and influence which stocks ultimately fare better.

Data, indicators and tools to monitor tariff risk

Useful data sources and indicators include:

• Tariff announcements and official government trade notices.
• Company filings (10-K, 10-Q) for foreign revenue and supply-chain descriptions.
• Trade volume and import/export data from customs agencies and national statistical offices.
• Tariff Risk Indexes, industry price indices (steel, copper), and producer price indexes.
• Market indicators: VIX, trade-weighted currency indices, and commodity-price series.
• PMI (Purchasing Managers Index) for manufacturing and supplier-delivery time signals.
• Analyst research from major banks and sell-side houses that screen for tariff exposure.

Practical tip: Build a small watchlist of companies and track quarterly disclosures for changes to sourcing, supplier locations and capex plans.

How analysts and institutions frame tariff exposure

Major research houses typically combine quantitative screens (foreign-revenue share, input import intensity) with qualitative analyst interviews to identify vulnerable or resilient names. Common screening rules include:

• Pricing power: measured by gross-margin stability and historical price raises.
• Sourcing flexibility: number of supplier countries and near-shoring options.
• Customer mix: proportion of revenue from domestic vs. export markets.

Different institutions weight these factors differently. For example, some banks place higher emphasis on input-cost exposure and immediate margin impact, while others prioritise longer-term demand shifts and policy-driven procurement changes.

Implications for portfolio construction and long-term investors

For long-horizon investors, tariff risk is one of many macro tail risks to consider. Practical guidance:

• Avoid overreacting to temporary policy noise; focus on durable fundamentals.
• Use screening tools to identify companies with structural resilience rather than presumed short-term winners.
• Maintain diversification across sectors and geographies to reduce single-policy risk.
• Consider modest tactical tilts toward resilient sectors while keeping size limits to avoid overconcentration.

Strategic approach: Incorporate tariff-risks into scenario analysis and stress-testing rather than building portfolio allocations solely around a single policy theme.

References and further reading (selected sources)

As of the article date, researchers and investors have used the following public sources for screening and commentary on tariff exposure and tariff‑resilient names: Kiplinger, U.S. News / Investing, The Motley Fool, institutional research summaries (e.g., Morgan Stanley), CNBC industry coverage, Finder, IG trading commentary, Seeking Alpha and Morningstar. For macro context and household balance-sheet signals, see the PA Wire reporting on consumer credit and mortgage demand. Readers should consult primary disclosures, official trade announcements and current analyst notes for the latest data.

Appendix A: Screening checklist — quick company assessment for tariff resilience

Use this printable due-diligence checklist when evaluating a company for tariff resilience:

• Percent foreign revenue (three-year average).
• Top 5 supplier countries and % of inputs sourced from each.
• Manufacturing footprint: share of production onshore vs offshore.
• Inventory days and ability to pre-buy key inputs.
• Historical gross-margin stability and ability to pass through price.
• FX exposure and hedging policies.
• Customer concentration and dependence on export markets.
• Capital-expenditure plans for reshoring or diversification.
• Analyst coverage notes on tariff risk and management commentary.
• Balance-sheet strength (net debt / EBITDA) to absorb short-term shocks.

Appendix B: Example model portfolio tilts for different tariff severities (illustrative, non-prescriptive)

• Mild tariff rise: Slight defensive tilt (overweight consumer staples & healthcare), maintain core equity allocation, increase monitoring of industrials and materials.

• Moderate tariff environment: More pronounced defensive and software/service tilt, add targeted exposure to domestic manufacturing producers likely to win procurement bids, modest cash/hedge increase.

• Severe/long-duration tariffs: Increase allocation to high-quality defensive names, increase liquid hedges (options, volatility products), consider targeted industrial positions backed by clear policy support, reduce high import-dependent discretionary exposure.

Sizing and timing depend on valuations, macro outlook and investor time horizon.

Notes and disclaimers

• This article is for informational and educational purposes only and does not constitute investment advice. It explains frameworks used by analysts and offers practical screening steps; it does not recommend specific trades.

• Market conditions and policy actions change quickly. Readers should verify data and consult licensed advisors before making investment decisions.

• As of 16 January 2026, according to PA Wire reporting, consumer credit stress indicators and mortgage demand figures contribute to the macro backdrop that investors should consider alongside tariff risk.

Further exploration and tools

To explore these ideas further, use company filings, industry research and screening tools. For investors interested in trading or research tools, Bitget provides market access and research-friendly features to monitor equity and derivative exposures. Explore Bitget's platform tools and educational resources to build and monitor tariff‑aware watchlists and hedges.

Reported date and sourcing note

• "As of 16 January 2026, according to PA Wire reporting by Daniel Leal-Olivas, lenders reported a jump in credit-card defaults and weak mortgage demand, highlighting consumer stress that may interact with tariff impacts on demand."

Primary industry sources referenced in this article include institutional and press research from financial media and bank reports (examples: Kiplinger, U.S. News, Motley Fool, Morgan Stanley, CNBC, Finder, IG, Seeking Alpha, Morningstar). Verify with original publications for the most recent updates.