These 3 Canadian Stocks Could Soar if Biden Beats Trump!

If Joe Biden beats Donald Trump, Canadian Stocks like Canadian National Railway (TSX:CNR)(NYSE:CNI) could benefit.

| More on:

The U.S. election is fast approaching. And that means just as much for Canadians as it does for Americans. The U.S. is Canada’s largest trading partner, and current president Donald Trump is a hardliner on trade. In his first term, he imposed many tariffs on Canadian industries — most recently, aluminum. If his opponent Joe Biden wins the election, then it could be good news for Canadian exporters. With that in mind, here are four Canadian stocks that could soar if Biden beats Trump.

CN Railway

Canadian National Railway (TSX:CNR)(NYSE:CNI) is a Canadian railway company that ships $250 billion worth of goods a year. A good percentage of those are Canadian exports headed to the United States. Among the commodities shipped by CN are grain, coal, and auto parts. These are exactly the type of “raw commodities” that Trump typically targets in his trade wars. Already, Trump has imposed tariffs on Canadian commodity exports. Most of them have been walked back. But they could be re-imposed. If Biden wins, the trade wars we’ve been seeing are unlikely to continue. That’s good for CNR, whose business is built heavily on shipping exports.

Canadian Pacific Railway

Canadian Pacific Railway (TSX:CP)(NYSE:CP) is another railway that ships goods into the United States. Like CN, it benefits the fewer barriers there are to international trade.

CP Railway ships an even wider variety of goods CN does. Its “industrial products” business ships items like steel and aluminum, which are among the items that have been targeted by Trump’s tariffs. If Biden wins, they’re less likely to be taxed again in the future. So, CP is another rail stock that could benefit from a Biden win.

Magna International

Magna International (TSX:MG)(NYSE:MGA) is a company that supplies parts to car companies. The items it sells include basic automotive components like seats, lighting, and control modules. In this role, it serves as a supplier to many U.S. auto makers. However, its business is one that could be vulnerable to Trump’s tariffs. In previous trade wars, Trump threatened to slap tariffs on imported cars. He didn’t actually make good on that promise, but he could in the future. The fact that Canada has a new trade deal with the U.S. and Mexico doesn’t matter: his recent aluminum tariff came after the deal was signed.

A Biden win could therefore be a big plus for Magna international. As a car parts company that largely supplies U.S. customers, it’s vulnerable to tariffs on auto parts. If Biden wins the election on November 3, then such tariffs are less likely to happen. That would benefit the company and likely send its stock higher.

However, the thesis for Magna is a bit weaker than the other two stocks on this list. Trump has already demonstrated a willingness to put tariffs on commodities, he’s been less keen to do the same with auto parts. He actually imposed tariffs on metals, but only threatened to do the same with cars. Of the three stocks mentioned here, Magna is least at risk of Trumpian tariffs. But a Biden win would put such tariffs out the conversation entirely. So, it would be a net positive for Magna.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Button owns shares of Canadian National Railway. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. The Motley Fool recommends Canadian National Railway and Magna Int’l.

More on Dividend Stocks

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

Dividend Stocks

The 3 Top Canadian Stocks to Buy With $1,000 Right Now

If you want consistent income, look to consistent dividend payers. These three stocks are some of the best in the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Want a 6% Average Yield? 3 TSX Stocks to Buy Today

These stocks pay good dividends that should continue to grow.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

Is Alimentation Couche-Tard Stock a Buy for its 0.9% Dividend Yield?

Couche-Tard stock's small yield is not enticing, but its growth potential could be a wealth creator.

Read more »

Hourglass and stock price chart
Dividend Stocks

5.2% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades!

With its 5.2% dividend yield, Toronto-Dominion Bank (TSX:TD) is a stock I'm eagerly buying.

Read more »