Stifel analysts said in a recent note that logistics and freight firms with exposure to North American trade were likely to see limited impact from President-elect Donald Trump’s plans for more trade tariffs.
But the brokerage sees risks for eastbound and trans-Pacific shipping companies, given that Trump has vowed heightened trade scrutiny against several Asian economies, especially China.
Trump has vowed to impose tariffs from “day one” of his Presidency and is set to take office next week on January 20.
Stifel said at the bottom line, tariffs are expected to drag on global freight demand, likely heralding higher shipping costs which will be passed on to consumers.
China is expected to be the worst hit by this trend, with trade flows from China likely to decline further in the coming years, denting the country’s already struggling economy. Trump has also threatened to target imports from Canada and Mexico.
But Stifel analysts said that tariffs on Canada and Mexico were “unlikely to stick,” given that the U.S. manufacturing industry still relies heavily on materials from the two.
The brokerage presented a favorable view on domestic and North American freight providers and saw heightened risk for companies with exposure to China and the East.
“We believe that domestic U.S. manufacturing capacity either cannot or will take a very long time to supplant current overseas capacity, this game is more or less zero-sum; succinctly: stuff has to come from somewhere.”
Among individual stocks, Stifel said it saw a favorable setup for GXO Logistics Inc (NYSE: GXO) after a weak 2025.
FedEx Corporation (NYSE: FDX) and United Parcel Service Inc (NYSE: UPS) are expected to see increased risk due to their international exposure.
However, the brokerage flagged the prospect of increased “nearshoring,” which is the practice of engaging in trade with geographically closer countries to offset cost increases.
Apart from GXO, Stifel said UPS and CSX Corporation (NASDAQ: CSX) were also likely to benefit from increased nearshoring. The brokerage has Buy ratings on all three stocks.
