Trade War USA: Which Stocks to Sell or Keep for Business Advantage
Estimated reading time: 5 minutes
The ongoing trade tensions between the U.S. and key global economies, particularly China, have created significant volatility in the stock market. For entrepreneurs, investors, and business leaders, navigating this uncertainty requires strategic decision-making—knowing which stocks to hold and which to sell can make a crucial difference in protecting and growing wealth.
In this guide, we’ll analyze the impact of the trade war on different sectors, highlight resilient stocks worth holding, and identify high-risk stocks to consider selling. We’ll also provide actionable investment strategies to help you stay ahead in these turbulent times.
How the U.S.-China Trade War is Affecting the Stock Market
The U.S.-China trade war has led to increased market instability, with major indices like the S&P 500 nearing bear market territory (down nearly 20% from recent peaks) (CBS News). The ripple effects include:
- Higher inflation risks due to tariffs increasing production costs.
- Reduced corporate profit margins, particularly for companies reliant on global supply chains.
- Economic uncertainty, raising fears of a potential recession (Robeco).
Sectors Most Impacted by the Trade War
- Technology & Growth Stocks – Heavy reliance on Chinese manufacturing makes them vulnerable.
- Financial Services – Market downturns have hurt banking stocks.
- Retail & Luxury Goods – Tariffs on imported goods squeeze profit margins.
Meanwhile, healthcare, utilities, and consumer staples have shown resilience, making them safer holds (Russell Investments).
Stocks to Hold During the Trade War
1. Value-Oriented Stocks (Healthcare, Utilities)
Stocks in defensive sectors like healthcare and utilities tend to perform better during economic uncertainty. These industries provide essential services, making them less sensitive to trade disruptions (Robeco).
2. U.S. Regional Banks (Undervalued Opportunities)
While financial services have struggled, some regional U.S. banks are now undervalued and could rebound once market conditions stabilize (Morningstar).
3. Campbell’s Soup (CPB) – A Defensive Consumer Staple
As a well-established consumer brand, CPB trades below its fair value and offers stability in volatile markets (Morningstar).
Stocks to Consider Selling
1. Tech & High-Growth Stocks
Companies like Apple, NVIDIA, and semiconductor firms face supply chain disruptions and declining demand due to tariffs. Reducing exposure may be wise until trade tensions ease (CBS News).
2. International Luxury Goods Manufacturers
European luxury brands (e.g., LVMH, Ferrari) are heavily impacted by U.S.-China tariffs, making them risky holds (Robeco).
3. Overexposed Financial Services Stocks
Banks with significant international exposure may continue to struggle amid economic uncertainty (Morningstar).
Smart Investment Strategies for Trade War Volatility
1. Diversify Across Asset Classes & Regions
Avoid overconcentration in a single sector. Consider bonds, gold, and emerging market ETFs to hedge against U.S.-China trade risks (Financial Post).
2. Adopt a Defensive Portfolio Approach
Shift toward dividend-paying stocks, utilities, and healthcare to minimize downside risk (Russell Investments).
3. Stay Liquid & Look for Buying Opportunities
Market downturns create undervalued stocks. Keep cash reserves to capitalize on future rebounds.
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Final Thoughts
Trade wars create both risks and opportunities. By holding defensive stocks, reducing exposure to vulnerable sectors, and diversifying strategically, investors can protect their portfolios. Stay informed, adapt to market shifts, and leverage expert insights to make smarter financial decisions.
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