The Biden administration’s decision to impose tariffs on $18 billion worth of imports from China could help a handful of stocks break out, according to Morgan Stanley. The tariffs announced Tuesday cover all manner of goods imported from China, from electric vehicles to solar cells to certain types of steel and aluminum. The move follows weeks of warnings from White House officials that called for China to change trade practices that the U.S. said hindered global supply chains. According to Morgan Stanley anaysts led by strategist Laura Sanchez, near-term growth headwinds as a result of the tariffs could be outweighed by the potential increased appetite for U.S.-made products over Chinese goods. “New tariffs on clean tech imports could have a detrimental impact on near-term growth, and thus climate benefits, but should serve as a demand accelerant for domestic-made products,” Sanchez wrote on Tuesday. Stocks that are poised to benefit include U.S. automakers Ford and General Motors as well as solar panel manufacturer First Solar . First Solar remains “a significant beneficiary of any trade policies that protect U.S. supply chains and provide developers with further incentive to buy domestic,” the 12-page report said. Three weeks ago, domestic solar manufacturers filed a new anti-dumping and countervailing duties petition that alleged dumping practices on crystalline silicon cells imported from Cambodia, Malaysia, Thailand, and Vietnam, the Wall Street investment bank noted. FSLR YTD mountain First Solar stock. Shares have ticked up nearly 9% in 2024 versus a 10% gain for the S & P 500. Morgan Stanley maintains an overweight rating on First Solar stock. “As a result, we would expect bookings momentum to accelerate and pricing to improve,” if the Anti-Dumping and Countervailing Duties petition is accepted by the Department of Commerce and International Trade Commission, the analysts wrote. Sanchez said that both General Motors and Ford will benefit from changes the new tariffs will bring to the interpretation of certain provisions in the Inflation Reduction Act, influencing electric vehicle sales. While “incentivizing locally manufactured EVs could come at a cost from a penetration standpoint,” both Ford and General Motors stand to benefit from higher demand for traditional gas-powered cars as EV sales remain sluggish, the analyst wrote. GM YTD mountain General Motors stock. “[L]ower EV penetration extends demand for [internal combustion engine vehicles], although most investors maintain the view that legacy [original equipment manufacturers] cannot slow down or halt EV spending plans without risking their terminal value,” Sanchez said. Morgan Stanley maintains an overweight rating on both Ford and GM. Shares of Ford have edged up 2% in 2024, while GM stock has climbed by more than 25%. F YTD mountain Ford stock.
