Tariff Exemptions List: Hunting for Micro- and Small Cap Alpha

In reaction to Trump’s tariff chaos on the market, investors are selling first and asking questions later. We want to profit from this irrational behavior.

What follows are the key product groups that are exempt from Trump’s last round of tariffs. 

Our goal will be to find a few nanocap, microcap and and small cap stocks that operate in these categories, where their stock prices are getting hammered. AND that may actually benefit from these tariffs. 

For example, yesterday, amid the NASDAQ being down 5.48%,  megacap $GT rose 10% due to:

Domestic Manufacturing Advantage: Goodyear produces a significant portion of its tires within the United States. This domestic production means the company is less affected by the tariffs imposed on imported goods, giving it a competitive edge over foreign manufacturers who may face increased costs due to the new tariffs. 

Increased Demand for Replacement Tires: The tariffs include a 25% levy on imported vehicles and auto parts, which could lead to higher prices for new cars. As a result, consumers might opt to maintain and repair their existing vehicles rather than purchasing new ones, potentially boosting the demand for replacement tires—a market where Goodyear has a strong presence

However, in the small cap world, it takes investors longer to find similar set-ups. We are looking forward to taking advantage of this time arbitrage.

1. Minerals and Ores:

• Natural graphite, calcium phosphates, magnesium carbonate, magnesite
• Fluorspar, cryolite, micaceous iron oxides
• Manganese, copper, cobalt, aluminum, zinc, chromium, tungsten, uranium ores

2. Coal and Derivatives:

• Anthracite, bituminous, lignite, peat
• Coke and semicoke, coal gas, tar, and creosote

3. Petroleum and Petrochemicals:

• Crude oil, refined petroleum products (kerosene, jet fuel, lubricants)
• Light oils, residual fuel oils, motor fuel blending stock
• Petroleum gases (propane, butane, natural gas)

4. Metals and Metal Alloys:

• Copper (refined, alloyed, wires, sheets, strips, rods, pipes)
• Zinc, tin, nickel, magnesium, titanium, tungsten, cobalt, bismuth, chromium
• Rare-earth metals and compounds (e.g. yttrium, cerium)

5. Chemicals and Industrial Inputs:

• Inorganic chemicals (oxides, peroxides, acids, hydroxides)
• Halogenated and sulfonated hydrocarbons
• Phenols, alcohols, ethers, aldehydes, ketones, carboxylic acids
• Vitamins, hormones, enzymes, antibiotics
• Dyes and pigments, organic surface-active agents

6. Polymers and Plastics:

• Polyethylene, polypropylene, polyesters, polyamides, silicones
• Acrylics, vinyl polymers, epoxide resins

7. Wood and Wood Products:

• Logs, chips, sawdust, charcoal, lumber
• Veneers, plywood, fiberboard, laminated wood
• Moldings, dowel rods, siding, flooring

8. Printed Materials:

• Books, newspapers, journals, printed maps, music sheets, advertising materials

9. Electronics Components:

• Semiconductors: diodes, transistors, thyristors, ICs (integrated circuits)
• LED parts and other photosensitive semiconductor devices

10. Fertilizers:

• Potassium chloride, sulfate, other potassic fertilizers

11. Precious and Industrial Metals:

• Silver, gold, platinum, palladium, rhodium, iridium, osmium, ruthenium (in bullion or semi-manufactured forms)
• Waste and scrap of the above metals

12. Medicinals and Pharmaceuticals:

• Vaccines, hormones, blood products
• A broad range of drugs including antibiotics, antidepressants, cardiovascular agents, vitamins

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