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Linamar Benefits from Trade War, Secures 200M CAD in Contracts

Word on the StreetThursday, May 8, 2025 11:04 pm ET
1min read

Linamar, a Canadian automotive parts manufacturer, has unexpectedly found a silver lining in the trade war initiated by the Trump administration. Initially perceived as a potential victim of the tariffs on automobiles and metals, the company has revealed that it may actually benefit from the trade tensions.

During a conference call with analysts, Linda Hasenfratz, the executive chair of Linamar, stated that almost all of the company's products shipped to the United States are exempt from tariffs. This exemption is due to the fact that these components comply with the United States-Mexico-Canada Agreement (USMCA). The company reported that it secured approximately 200 million Canadian dollars in contracts from other suppliers in the first quarter. This significant increase in business is attributed to manufacturers looking to shift production to the United States to avoid tariffs.

Analysts have taken note of this development. Jonathan goldman of a prominent financial institution suggested that Linamar could become a winner in the automotive tariff landscape. He pointed out that the company is benefiting from increased contract manufacturing opportunities as other manufacturers seek to relocate their production facilities to the United States. Similarly, Brian Morrison of td cowen upgraded Linamar's stock rating from "hold" to "buy" based on the same rationale.

Hasenfratz expressed her concerns about the broader impact of the tariffs, particularly on the profitability of original equipment manufacturers (OEMs). She noted that the increased costs of imported components could lead to higher prices for consumers, which in turn could dampen demand and affect the entire automotive supply chain.

Despite the initial market reaction to the tariffs, which saw Linamar's stock price drop by 25% between January 30 and April 8, the company has since recovered almost all of its losses. This resilience is a testament to Linamar's strategic positioning and its ability to navigate the complexities of the trade war. The company's proactive approach to securing new contracts and its compliance with USMCA have positioned it favorably in the current trade environment.

Ask Aime: "Will Linamar's tariff exemption boost its stock value?"

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FirmMarket4692
05/09
Linamar dodging tariffs like a pro, gotta love that USMCA edge. OEMs might not be so lucky, though. 🚗💸
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sniperadjust
05/09
Linamar dodging tariff bullets like a pro, while others crash. Smart moves and USMCA compliance are gold in this messy trade war.
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MickeyKae
05/09
@sniperadjust Linamar's smart moves = win.
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AIONisMINE
05/09
Smart moves, Linamar securing that sweet CAD 💰
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Funny_Story2759
05/09
Linamar's resilience is wild. Went from 25% down to almost back to even. They're playing this tariff game way better than most.
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Arturs727
05/09
Holding $LNR long-term, playing trade war chess
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ev00rg
05/09
Holding $LNR long-term, despite the dip. Smart contract play and USMCA compliance make it a solid bet in this messy trade war.
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Direct_Name_2996
05/09
Trump's tariffs causing chaos, but Linamar finding gold in the mess. Contract manufacturing is where it's at right now.
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Nicadelphia
05/09
@Direct_Name_2996 Totally agree, Linamar's killing it.
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WholesomeLowlife
05/09
@Direct_Name_2996 What's next for Linamar?
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DrSilentNut
05/09
Tariffs making everyone rethink supply chains. Linamar's securing deals while others stumble. Could they be the new swing trade darling?
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Dry_Meaning966
05/09
@DrSilentNut Could Linamar keep riding this wave?
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SISU-MO
05/09
Linamar dodging tariffs like a boss
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sssauber
05/09
@SISU-MO Linamar's tariff moves: YOLO investing in exemptions.
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Unlikely_Disaster_67
05/09
Wow!The TSLA stock was in an easy trading mode with Pro tools, and I made $146 from it!
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