Trump's fresh wave of tariffs just landed—and investors should brace for impact. UBS says the new regime could act like a $700 billion tax on U.S. consumers if companies pass on the full cost. That's nearly 10% of annual retail sales—enough to erase years of growth in one shot. The ripple effect? A potential 2% hit to U.S. GDP. While the tariffs exclude Mexico and Canada under USMCA, UBS analyst Amit Mehrotra warns that even a small dent in household wealth can translate into a major blow to demand. There's a glimmer of hope: if this move is extreme enough, other countries might ease up on retaliation. But for now, the message is clear—this is not just noise.
Some stocks, though, might have built-in shock absorbers. Names like Carrier Global (CARR, Financial), Otis Worldwide (OTIS, Financial), and ESAB (ESAB, Financial) stand out as better positioned, thanks to their global reach and high-margin service businesses. Fastenal (FAST, Financial) and W.W. Grainger (GWW, Financial) may even see a short-term boost from pricing power. The USMCA carve-out also helps industrial names relying on North American supply chains, giving them a cost buffer others won't enjoy. Still, companies with heavier exposure to consumers—or to China—are likely in for some pain. As Mehrotra puts it, “no company is truly immune.”
That said, volatility brings opportunity. UBS points to a shortlist of high-quality names with durable earnings engines and room to run once the dust settles: think 3M (3M), Johnson Controls (JCI, Financial), Trane Technologies (TT, Financial), Eaton, and Parker-Hannifin (PH, Financial). These aren't short-term trades—they're solid operators with global moats. If this selloff shakes loose some value, long-term investors might want to be ready. Because while the tariff headlines sting, what happens after the panic could separate the resilient from the wrecked.
