Linamar Says It’s a Beneficiary of Trump’s Tariffs

• Linamar benefits from USMCA
• New contracts worth $200 million
• Shares up 10% in Toronto

Canadian auto parts manufacturer Linamar Corp., once considered a casualty of tariffs imposed by President Donald Trump, has now revealed it may actually be one of the trade war’s winners.

Linda Hasenfratz, CEO of the company, stated that most of the products Linamar ships to the United States are exempt from tariffs.

This is because the parts produced by the company meet the conditions established in the United States-Mexico-Canada Agreement (USMCA).

During a conference call with analysts, Hasenfratz emphasized that Linamar has not only avoided additional costs.

Linamar and the Trade War: An Unexpected Advantage

“Practically everything” Linamar sends to the U.S. is tariff-exempt because the parts comply with the trade agreement between the United States, Mexico, and Canada, explained Canadian auto parts CEO Linda Hasenfratz.
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Linamar has also taken advantage of the situation to close new contracts worth nearly 200 million Canadian dollars (approximately 144 million USD) in the first quarter of the year.

The trade war, initiated by the Trump administration, has posed a challenge for many companies in the automotive sector.

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The U.S. imposed tariffs on components manufactured outside the USMCA zone, which impacted various international suppliers.

However, Linamar’s case has been different.

Tariff Exemption Thanks to USMCA

Thanks to the trade agreement among the three countries, the Canadian firm has been able to stay competitive in the U.S. market.

Despite this positive outlook, Hasenfratz expressed concern over the impact tariffs could have on the cost of imported parts.

Rising prices may put upward pressure on automakers’ production costs, which could ultimately affect consumer demand.

In this regard, the executive noted that although the tariffs have not directly impacted Linamar’s earnings, the automotive sector as a whole could suffer due to disruptions in the supply chain.

Impact of Trump’s Tariffs on the Automotive Industry

It is worth noting that after Trump’s tariffs were imposed, Linamar’s stock price dropped by 25% between January 30 and April 8.

However, the company has almost completely recovered from that loss. Shares rose by 10%, reaching 58.44 Canadian dollars on the Toronto Stock Exchange.

In its Q1 earnings report, Linamar beat analyst expectations and also raised its quarterly dividend by four Canadian cents.

The company, which also manufactures industrial equipment for agriculture and construction, continues to grow across multiple sectors, demonstrating its resilience in the face of restrictive trade policies.

Source: El Financiero