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(Bloomberg) — Canadian auto parts maker Linamar Corp., once thought to be a casualty of President Donald Trump’s tariffs on cars and metals, says it’s now a possible beneficiary of the trade war.
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“Virtually everything” Linamar ships to the US is exempt from tariffs because the parts comply with the US-Mexico-Canada trade deal, Executive Chair Linda Hasenfratz said during a conference call with analysts.
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As a result, Linamar took over about C$200 million ($144 million) in contracts from other suppliers in the first quarter, according to its earnings presentation. The US has imposed tariffs on components made outside the USMCA zone.
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“We think the company could actually be an auto tariff winner as it gains takeover work” from manufacturers looking to move production to the US, Scotiabank analyst Jonathan Goldman wrote in a note to clients late Wednesday. On Thursday, TD Cowen analyst Brian Morrison upgraded his recommendation on Linamar’s stock to buy from hold, citing those opportunities.
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The stock was up 10% at C$58.44 at 2:44 p.m. in Toronto, hitting its highest level since Jan. 31.
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Trump’s tariffs on metals and auto parts have had little effect on Linamar’s bottom line, Hasenfratz said, and her greater concern is for automakers themselves. Increased costs for offshore parts put upward pressure on prices, “which obviously would impact consumer demand and impact all of us,” she told BNN Bloomberg Television.
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Guelph, Ontario-based Linamar saw its share price drop 25% between Jan. 30 and April 8 as Trump imposed tariffs on US imports from Canada and Mexico. The stock has now recovered nearly all of those losses.
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Linamar, which also makes industrial equipment for agriculture and construction, reported first quarter adjusted earnings on Wednesday evening that beat analyst estimates. It also hiked its quarterly dividend by four Canadian cents.
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