Source: Getty Images
Written by Tony Dong, MSc, CETF® at The Motley Fool Canada
If there is one strange silver lining to the ongoing U.S. and Israel conflict with Iran, now well into its sixth week, it is that tariffs have taken a back seat. Earlier in 2025, Trump’s threats of tariffs on Canada were front and centre.
For a country that depends heavily on trade, that kind of rhetoric creates real uncertainty. Railways, exporters, and manufacturers all feel it. Even if tariffs are never implemented, the uncertainty alone makes it harder for companies to plan, invest, and allocate capital.
That said, this distraction will not last forever. Eventually, Trump’s attention will shift back to trade policy. And when it does, tariffs could once again become a source of volatility for Canadian markets.
There is not much you can do to control that as an investor. Staying diversified and sticking to a long-term plan is still the best approach. But it is also worth recognizing that some businesses are naturally more insulated than others.
One area that tends to hold up better is domestic consumer staples. Here’s why, and two stocks that could be worth a look.
Tariffs are essentially taxes on imported goods. They raise costs for businesses that rely on foreign inputs and can disrupt supply chains. That leads to higher prices, lower margins, and a lot of uncertainty around future demand.
Consumer staples operate differently. These are businesses that sell essential goods like groceries and household items. Demand tends to be steady regardless of economic conditions. People still need to eat, and they still need basic everyday products.
For Canadian grocery chains in particular, there is another advantage. Much of their supply chain is either domestic or diversified across multiple countries. They are not as reliant on a single cross-border trade relationship. Some products are sourced locally, while others come from regions outside the U.S., such as Mexico or international suppliers.
That helps reduce direct exposure to tariffs. They can also pass through some cost increases to consumers more easily than other industries, simply because their products are non-discretionary. It is not that they are immune, but they are generally more resilient.
Two names that stand out in this space are Loblaw Companies Limited (TSX: L) and Metro Inc. (TSX: MRU).
Loblaw is the dominant player, with a market capitalization of about $75 billion. Metro is smaller, around $20 billion, but still a major force in the Canadian grocery landscape.