Our Shopping List of 10 Tariff Proof Stocks!

Tariffs got a 90-day pause but uncertainty remains. Even if they are implemented after 90-days, these stocks will still thrive in a high tariff environment!

Apr 13, 2025

“I am selling everything, this market is going to collapse…”

This is what I heard all the week from family, friends and relatives until tariffs got paused on Wednesday. To each one of them, my response was the same— this is going to be one of the best times to buy!

Same people are now overly optimistic after the pause, yet nothing has really changed. Bloomberg clarified that the pause reduced the effective tariff rate from 27% to 24% as Chinese products except electronics were still tariffed at 125% at the time of pause. Thursday, Trump raised them to 145%. If the market was going to collapse then, it should still collapse.

This is what I would do if the market collapses.

Let’s get this straight, most people talk of the market as if it’s something that has a soul and ability to decide for itself—“this market is collapsing.”

They all came to me with all the smart talk they heard here and there:

“This is the worst policy mistake for America in the last 100 years and it’ll be so bad for the American economy. Inflation will skyrocket, investment will drain, growth will slow down.”

You know what, each of these are true.

But so did the Smoot-Hawley Tariffs, Korean War, Gulf War, Black Monday, Dotcom Bubble, Global Financial Crisis, multiple government shutdowns in the last two decades, Covid…

They all were true, most of them were caused by what looked like the biggest policy mistake until then… They all looked like the financial world was collapsing…

Yet, they weren’t. From the hindsight, these were the best times to buy stocks.

In my view, investors should dump this faulty notion: You aren’t going to get the highest absolute quality companies at bargain prices if it’s not for a big policy mistake, natural catastrophe, pandemic etc…

The market is inefficient, but it’s not inefficient enough to give you Amazon at 20 times forward earnings in the best of times.

In these times, an investor should know that a big policy mistake is underway yet he should still bet on the stocks believing that mistakes will be corrected, catastrophes will be handled and pandemics will be cured…

Because it’s always been this way.

America has made giant policy mistakes in the last 100 years, yet it has achieved to overcome them and thrive every time. This is what Buffett means by “Never bet against America.”

Let’s look at the situation with a cool head. Tariffs are a big policy mistake but what’s the possibility that this mistake won’t be corrected— I think nearly 0.

They have already paused it to negotiate a better deal for all countries except China!

Even if they decide to implement tariffs after the 90-day pause, I think there are just a few ways this could end:

The Trump administration may reduce them after negotiations.
If they don’t, they will lose midterms next year and Democratic Congress will interfere.
Even if they can’t, the pain could be too severe that Trump will cancel them eventually.
The Supreme Court may cancel them as it’s a tax on consumers and it’s unconstitutional.
In the worst case, next-admin will cancel them.

If they make this mistake after 90-days, chances that it will be corrected by one of the ways above is nearly 99%.

Meanwhile, US companies will keep being the best in the world, the US startup ecosystem will remain as the best and its AI labs will remain as the best foundational model providers…

This means that this blunder allows you to buy what will remain as the best companies in the world for bargain prices.

There is a 1% chance that these mistakes won’t be corrected, and the Trump administration will impose full tariffs after 90 days. In this case, the effects will be catastrophic… It can even bring the end of the US dominance.

However… People thought such a thing would happen many times in the last century yet it has never happened. The US is still the richest, strongest and the most innovative country in the world.

Let’s remember Howard Marks here:

All crises look like the end of the financial world. This should give you an ease of mind. If the financial world ends, what you hold or not won’t be important, you’ll have larger problems. If the world doesn’t end, you missed a generational buying opportunity, so you didn’t do your work. And the world generally doesn’t end…
—Howard Marks

The bottom line is that you have to be a buyer of uncertainty if you want outsized returns! If the future is crystal clear, you may assume all no brainers are gone.

Yet, this doesn’t mean that you should buy indiscriminately…

Some companies are better positioned to perform in certain environments than others.

If the Trump administration proceeds with tariffs after 90 days, it’s not hard to forecast what will follow— elevated inflation, followed by high rates, low growth and so recession…

Companies that outperform both in inflation and recession? Do they exist?

They do. I promise.

An example? American-Express.

It cuts commissions on basket total. Inflation will grow basket totals so the dollar value of its commissions will also grow.

In recession, people still keep buying and wealthier people cut spending less than others. American Express will keep cutting commissions from what people buy and it’ll be less affected as average wealth of its user base is higher than those of Visa and Mastercard.

It’s an amazing business:

5-year revenue CAGR: 18%
Net Profit Margin: 16%
Return on Equity: 34%

It’s just trading at 16 times forward earnings! I own a great deal of it.

This was 10th in our list. I have 9 more stocks like this on my watchlist going into tariffs wars.

So, let’s cut the BS and dive in!

9️⃣ TSMC

5-year revenue CAGR: 16%
Net Profit Margin: 40%
Return on Equity: 30%
Forward P/E: 14

Let’s take a step back and think about why this stock has been going down despite the fact that semiconductors are exempt from tariffs.

It’s because investors think tariffs will bring spending down both for consumers and corporations. Bigtech companies that have been driving semiconductor expenditures for the last two years will reduce their spending.

First, spending will inevitably slow, this is true—it’s just not the whole picture.

The spending will eventually slow down because hyperscalers are spending over $300 billion this year in AI infrastructure.

How long can they sustain this? At some point, they will have to start collecting returns on their investment.

Yet, even then, they’ll have to keep spending to maintain their infrastructure and incrementally upgrade it to stay competitive.

Overall, the number of chips we need will never decrease.

TSMC is the largest chip manufacturer in the world. It has just expanded its market share from 63% to 67% last quarter and keeps above 90% market share in advanced chip manufacturing.

Its yields in 3nm process and 2nm process are 20% and 40% higher than those of Samsung, its closest competitor.

On top of those, consider that AI infrastructure is just being built out. How many more servers did we need for the Internet after 1994? This is just 1994 for AI. Workload will ever increase, we know this for sure. This will require more chips.

No matter who designs the most cutting edge chips of the era, it’ll be TSMC to manufacture it.

This beautiful business is now trading at 14 times forward earnings.

If you think this is justified, you should think that it’ll be valued at 10 times earnings in 2028, 8 times earnings in 2030 and so on? Do you believe this will be the case?— I don’t think so.

This is one of the stocks that I’ll be comfortably buying in the most uncertain economic environments.

8️⃣ ASML

5-year revenue CAGR: 16%
Net Profit Margin: 40%
Return on Equity: 30%
Forward P/E: 24

This is one of the last pure-blood monopolies in the world. Such companies have become so rare that we now use the term “monopoly” largely for dominant companies in their markets.

ASML is a textbook monopoly— it has 100% market share in Extreme Ultraviolet Lithography Machines.

These are the machines that are required to manufacture the cutting edge chips. Without ASML, there are no Nvidia GPUs, there is no AI, there is no robotics…

What applies to TSMC, applies to ASML and perhaps to a greater degree. It’s also exempt from tariffs as it falls into the semiconductor group.

ASML is even better positioned to thrive in the tariff world than TSMC.

This is for two reasons:

1) Its customers are foundries like TSMC and ASML machines take months to build and deliver. Thus, those companies make long-term predictions and put orders accordingly. They aren’t cancelling or stopping orders because there may be tariffs for the next 6 months.

2) ASML generates a significant portion of its revenue from maintenance and services. This makes up 29% of all income. As its installed base grows and gets older, this segment will grow further.

And you have this exceptional business trading at its lowest valuations in 5 years:

What’s even better? It’s heavily buying back shares. It’s been buying back approximately 90k of shares everyday since January.

There is no way you will be losing money on this business in the long term from here.

My average price is $680 and I believe it is an amazing offer at $668!

7️⃣ MercadoLibre

5-year revenue CAGR: 51%
Net Profit Margin: 10%
Return on Equity: 10%
Forward P/E: 42

Many think overly simplistic about this business— largest e-commerce marketplace in Latin America.

It indeed is but when you put it that way it sounds like it’s nearly the same as Pinduoduo, just an e-commerce marketplace..

This is nowhere near the truth.

It’s not just an e-commerce marketplace, it’s a digital ecosystem of integrated businesses that grow together in a self perpetuating flywheel.

It has the largest e-commerce marketplace in LatAm, it has a fintech business, it has the largest classifieds business and a logistics infrastructure comparable to that of Amazon’s.

Its e-commerce marketplace benefits from Amazon and Costco like flywheel— more users attract more merchants, competition among merchants cut prices, lower prices attract more users…

As e-commerce marketplace perpetuates its growth, it also sets another flywheel in motion across its own ecosystem. More users in the marketplace means more users for its fintech, in turn its fintech provides both merchants and buyers with easier payment plans, attractive loans etc which locks in both groups of users in its marketplace.

Now, what’ll be the impact of tariffs on this business?

It won’t have any business specific material impact beyond the market wide contraction.

It’s already the cost leader so it’ll be less affected by the contraction in spending. Further, its diversification into fintech, asset management, insurance, payment processing will put a cushion made of capital light businesses below it.

What’s best? It doesn’t operate in America so it also adds a geographic diversification in your portfolio.

Below $1800 levels would be a great buying opportunity for the long-term!

6️⃣ UnitedHealth Group

5-year revenue CAGR: 11%
Net Profit Margin: 5%
Return on Equity: 5%
Forward P/E: 20

At the times of uncertainty, people resort to one simple path, they cut unnecessary spending.

They cut back on upgrading their technological devices, going on holidays, eating out etc.. Yet, in any environment, there is one bill that is paid before all others— insurance bill, and health insurance before all.

The consequences of not doing so it catastrophic:

If you get sick, medical bills may bankrupt you while you are trying to save.
You may not afford the required treatment out of pocket.

This is why health insurance is paid first, this is why health insurers can pass all their costs on to customers and this is why the business stays strong in all environments.

And UnitedHealth is dominating this industry…

It got shaky after the CEO of its insurance arm got murdered and further dipped after Bill Ackman raised suspicions as to its profitability…

In all these occasions, we had been a heavy buyer of the stock as we knew that its above average profitability stemmed from its impeccable vertical integration with its health services arm Optum which is still growing above 10% annually.

Result?—A perennial compounding machine!

Given its defensive nature and its ability to pass all the costs without losing business, it’s as tariff proof as it gets.

The stock currently looks fairly valued at $600, my average price is 490, which means it’s up 22% year-to-date while S&P 500 is down 9%.

Below $550 levels would be a nice entry point for those seeking an exposure.

Now, let’s get to top 5.

🚨 UnitedHealth is just one of the exceptional companies in our portfolio.

Our portfolio is up 24% in the last year against 5% of S&P 500.

Members get full access to our portfolio, unlock all the deep dives and join our private discord community!

To celebrate our new members, here is a link to claim 25% discount! Valid only until tomorrow!

Get 25% off forever

5️⃣ NuBank

5-year revenue CAGR: 50%
Net Profit Margin: 32%
Return on Equity: 28%
Forward P/E: 20

This is the biggest bank in Brazil and the largest digital bank in the world.

Yet this definition also oversimplifies its business just as MercadoLibre.

It’s not just a digital bank, it’s an ecosystem of interconnected financial services.

It has digital banking solutions, payment processing solutions, investment solutions, insurance brokerage and an e-commerce marketplace. It’s a diversified financial conglomerate.

It already has more than 100 million users with a virtually infinite runway for growth. It’s only active in Brazil, Mexico and Colombia. These countries combined make 60% of the continent’s GDP. If it expands to just Argentina and Chile too, its active countries will be making 80% of the continent’s GDP.

It’s planning to move its headquarters from Brazil to the UK in order to expand globally.. Imagine what could happen if it does this— easily a $300 billion fintech conglomerate.

On top of its amazingly attractive valuation, it’s well positioned to thrive in a high tariff environment.

If the US keeps those tariffs in place for a long time, USD will inevitably weaken, which will be a significant tailwind for Nubank as foreign exchange rate fluctuation is going to turn into a tailwind rather than a headwind for it.

I have been buying the stock every time it went below $10 and I’ll keep doing this as long as I have dry cash to deploy!

5-year revenue CAGR: 77%
Net Profit Margin: 8.5%
Return on Equity: 30%
Forward P/E: 43

The dominant direct-to-consumer tele-health company in the US.

They have been dominating the market in the last two years which is illustrated by their phenomenal growth. However, I think those numbers hide its real strength— its stickiness.

Currently, more than 50% of all its subscribers are on the personalized plan.

This means that customers are regularly receiving a medication personally tailored for them at way lower prices than the legacy providers. These people are already here to stay.

Now think what’s going to happen with tariffs?

Even American providers will have to significantly raise their prices as most of their active ingredients are imported from India and China. They’ll have a harder time readjusting their supply chain.

Hims on the other hand is agile.

It has just acquired a peptide facility to produce its own active ingredients including Semaglutide and other peptides for weight-loss, supplements, skin-care products and peptides that elicit testosterone.

In short, it’s already well positioned to manufacture the active ingredients for most of its products at home.

While big pharma struggles with sourcing enough ingredients from home because of their massive scale, Hims will have already pivoted without a negative effect on its prices.

Result? It’s going to rapidly gain market share.

It’s one of the best companies to own going through a high tariff environment and beyond it. $26 and $22 are my buying and additional zones. As I already own the stock, I am skipping the $26 level and I’ll add if it reaches $22.

3️⃣ Pepsi

5-year revenue CAGR: 7%
Net Profit Margin: 10%
Return on Investment: 18%
Forward P/E: 17

Pepsi gets no introduction. Everybody knows what it does.

Yet, many people significantly underestimate it and think of it just a soda company. No, Pepsi, is one of the largest consumer staples conglomerates in the world.

This diversification into staples is already a good hedge against tariffs as people don’t tend to cut spending on them unless they have no other option. We have seen this play out in the first term of Trump. In that trade war, consumer staples outperformed all other sectors of S&P 500.

Yet, there is one other reason why it’s a very good hedge against tariffs.

These products are mostly commodities, they aren’t exported or imported in most parts of the world. Instead, Pepsi has localized supply chains in all big regions and countries it operates.

Lays in Germany are made of German potatoes, packaged in German factories where Germans work. This applies to all major countries it’s products are selling. Without localized supply chains, it would be impossible to stay competitive against local brands as costs would be too high.

Plus, at this level the stock is offering nearly 4% dividend yield.

I think it’s a good defensive stock to park your money while you wait for the world economy to navigate through tariff situations.

2️⃣ Lemonade

5-year revenue CAGR: 50%
Net Loss Ratio: 62%
Forward P/S: 3

We have already settled that insurance is a defensive play.

In uncertain times, the last thing you want to deal with is unexpected costs out of pocket. This is why people don’t generally skip their car insurance.

If you are in insurance, you are already defensively positioned—if you are offering cheaper insurance, that’s even better.

Lemonade does exactly this.

It’s not just an insurance company, it’s an AI based, direct-to-consumer insurance company.

It has replaced humans with AI agents in its onboarding and claims processing and it employs direct-to-consumer marketing rather than working with agents.

Result? It’s 68% cheaper than competitors.

This makes it a go-to company for a product that people can’t afford to not own, especially at the times of uncertainty.

What’s even better?

It’s cash flow positive.
Management expects 30% annual revenue growth for the next 5 years.
It’s set to become EBITDA positive in 2026 and profitable in 2027.

You are currently getting all these at 4 times sales!

I love it as it allows you to take both an aggressive and a defensive position going into uncertainty.

Current price is already attractive and I’ll be a certain buyer below $25!

1️⃣ Uber

5-year revenue CAGR: 40%
Net Profit Margin: 22%
Return on Investment: 18%
Forward P/E: 29

What’s better than having a localized supply chain in a high tariff environment?

It’s having a localized services base—Uber has exactly this.

It’s the largest mobility network in the world with giant ride hailing and delivery businesses.

Unlike goods businesses, inputs aren’t physical goods in services, they are effort and time of human beings. This allows a services business to have three critical tools to stay strong in financial downturns:

Flexible supply.
Low fixed costs.
Localized pricing.

Normally a business needs to invest upfront to build its capacity, this is what fixed costs are. Once that capacity is built, supply can’t easily adjust according to demand. Easiest thing you can do is work under a minimum efficient scale which is not particularly profitable.

Think of it like Costco’s opening a warehouse with a capacity for 50,000 people a day but it receives only 5 thousand.

Uber doesn’t have this.

Its fixed cost for building a multi-sided platform has already been compensated for and supply adjusts itself according to demand. If there is more demand, more drivers will be online, if demand decreases, there’ll be less drivers. This adjustment comes with 0 overhead cost for Uber. It doesn’t need to fire people to scale down.

Plus, those people providing the services work with localized pricing. An Uber drive in Los Angeles doesn’t cost the same as one in Mexico. This provides the business further flexibility in the face of country specific or regional shocks.

Last and perhaps the most important, I think people largely misjudge how Uber’s business will be affected from a potential recession. They think the volume will shrink significantly—I don’t think it will.

What’s the substitute for Uber? Most people think public transportation is a substitute for Uber and people will be switching to it in volume in case of a recession.

This is not the case.

The thing is that where public transportation is good, people are already taking it. For instance, I was visiting Munich last week and I admired their underground system. It was impeccable and it was so easy to go anywhere by rail. Calling and waiting for Uber wouldn’t be just more expensive, it would also be harder and take longer.

Uber isn’t a substitute for public transportation, it’s a substitute for owning a car. And people don’t generally decide to buy cars when the economic conditions are uncertain.

Thus, I believe even in case of a recession, Uber’s volume won’t shrink as much as people think and it’ll easily adjust to new conditions due to its localization flexibility and very low fixed costs.

What’s better? It’s just trading at 22 times free cash flow while the management expects it to grow nearly 50% by 2027.

I think this is one of the best businesses to own going forward.

🏁Conclusion

Trump’s pausing tariffs just dropped the effective tariff rate from 27% to 24% as China is still tariffed at 125%. This is enough to kick the US economy into a recession.

This is a big policy mistake and it’s uncertain whether it’s going to be corrected.

Most people think this uncertainty is bad to make an investment decision. I think the exact opposite is true.

Investors shouldn’t think that they’ll be able to find bargains when everybody is convinced that everything is going well. Market is not that inefficient.

To outperform, you should take the optimist view while everybody is a pessimist.

I think this should be relieving. If you are wrong, what you could have done won’t matter anyways. If the world order as we know it ends, I doubt whether any financial instrument we know today could remain valuable. On the other hand, if you are right, you make a killing.

This is what I have done all my investing career and I assure you it never gets easier.

I first get annoyed, seek safety, look at the options… But I know there is really just one option. I convince myself and say—fuck it, I am buying.

I buy businesses that I think will thrive or at least stay relatively strong in uncertainty.

It never gets easier, but as I have said, there is no other option really.