It's been almost two months since President Trump's "Liberation Day" announcement, during which he presented a litany of new tariff policies in an effort to level set trade relations which major partners such as China, Europe, and Canada.
Since the April 2 announcement, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have each experienced double-digit declines -- only to rebound sharply over the last few weeks as some updated trade deals have come into view. Even though the market has been roaring as of late, I don't think investors are out of the woods quite yet.
Tariff policies can change swiftly, and for now, it's still difficult to discern what companies may come out stronger as a result of these new trade deals.
Below, I'll detail how tariffs work and highlight two companies I think could emerge as winners of Trump's tariff wars.
How do tariffs work?
Tariffs are a tax that are placed on imported or exported goods. Generally speaking, tariffs are employed as a mechanism to bring other countries to the table and negotiate new terms in trade deals.
In addition, tariffs can also be a way to put some pressure on companies to increase domestic manufacturing as opposed to outsourcing labor overseas.
While this might sound nice in theory, economists worry that more manufacturing investment in the U.S. will be a costly endeavor for businesses -- hence, they may choose to pass those expenses on to the consumer, thereby spurring inflation.
Image source: Getty Images.
1. Home Depot
During periods of inflation or high interest rates, consumers may put off investing in home improvement projects or purchasing real estate altogether. While that might give investors some initial feeling of trepidation for Home Depot (HD -0.11%), there's more to the picture.
Homeowners know all too well that some projects simply cannot be ignored. Considering the home improvement industry in the U.S. is essentially a duopoly between Home Depot and Lowe's, the company is still positioned to absorb a lot of this demand.
HD Revenue (TTM) data by YCharts
Per the graph above, investors can see that over the last two decades, Home Depot has been able to consistently increase revenue and operating margins -- even during times of economic uncertainty. For reference, the two grey-shaded columns represent U.S. recessions. Although there was some pullback in Home Depot's business during these times, the company was ultimately able to outmaneuver these challenges. I see the current tariff situation as no different.
Considering Home Depot sources more than half of its inventory from domestic vendors, the company likely will not have to take on as much cost increases from foreign imports compared to smaller competitors or niche retailers. This is important as the majority of the company's goods already come from the U.S. -- making it highly unlikely that it will need to raise prices and stifle consumer purchasing power.
The company has made a number of strategic moves to strengthen its supply chain, all while putting the customer first. For this reason, I think Home Depot's business model will hold up resiliently during this period of pronounced tariffs and its stores will remain an essential pocket of the otherwise sensitive retail industry.
2. Nucor
Next up on my list is steel producer Nucor. In the chart below, investors can see that shares of Nucor have fallen out of favor with investors throughout 2025.
While shares have bounced back from lows in April (in parallel with Trump's tariff announcement) the stock is still facing some pressure. For starters, the steel industry is cyclical. This makes expectations around consistent growth somewhat unrealistic. Despite these dynamics, I see Nucor on the precipice of some lucrative opportunities.
Higher prices for imported steel from other countries, particularly China, should bode well for Nucor. In addition, since Trump took office in January, a number of companies across many different industry sectors have committed to increased domestic manufacturing. Chief among these initiatives is Project Stargate, a $500 billion vision for more artificial intelligence infrastructure in the U.S.
I see these factors as major tailwinds for the steel industry, and I think Nucor is positioned to capture a portion of this spend. For this reason, now could be a good time to buy the dip as Nucor's growth could witness a sharp rebound sooner rather than later.
