The rates have increased. Exports were volatile. Politicians have resorted to extraordinary measures. The pressure was so great that Prime Minister Carney had to sign a trade deal with China that would have been unthinkable just a year ago. And indeed, the pressure has had its effects in the real world. For example, in 2025, GDP growth was only 1.3%, lower than in previous years after the corona crisis.
Nevertheless, many Canadian businesses are thriving despite trade tensions. Particularly in industries that are primarily domestic or international but not involved in cross-border trade, performance has been surprisingly good. In this article, I examine the Canadian companies that are thriving despite trade tensions.
Banks
TSX banks are among the best examples of Canadian companies thriving despite trade tensions. The Big Six Banks mainly lend money within Canada. They also have extensive foreign operations, but since then their U.S. operations have been full-fledged inside to the US, the services provided are not considered exports. This reality has insulated TSX banks from the fallout of Trump’s tariffs and the tense trade situation of 2025/2026 more broadly.
To consider Royal Bank of Canada (TSX:RY), for example. Royal Bank (also known as ‘RBC’) is a Canadian bank that is really booming this year and over the next five years.
Royal Bank has two main geographic segments:
- Canada. Here RBC is involved in retail banking (deposits and loans to ordinary Canadians), investment banking and asset management.
- International. This consists mainly of investment banking and asset management in the United States, and asset management in the Caribbean.
As you can see, RBC has significant exposure to the US. Despite that fact (or even because of it), the bank is thriving, with revenue growth of 15%, profit growth of 25% and a profit margin of 33% in the trailing twelve month period. The bank’s US services are not considered exports, which is one of the reasons why the bank is doing well despite significant US exposure.
Interest rates are currently stabilizing in Canada and are expected to decline in the United States. This could put some pressure on RBC’s core lending business; but on the other hand, it could be bullish for the company’s investment bank. In the very long term, RBC should do well.
Energy
Another Canadian sector that is doing quite well amid the Trump 2.0 trade tensions is the energy sector. Although TSX energy stocks have underperformed the TSX based on price returns over the past twelve months, they have easily outperformed the S&P500 in the same period. Also, their price performance over the last twelve months was better than that of the TSX in a typical year.
Why have TSX energy stocks done so well over the past twelve months?
In this case it is not because of tariff immunity. Canadian oil deliveries to the United States are classified as exports; a large portion of Canadian oil companies’ profits come from exports; and US oil exports are taxed at 10%.
However, Canadian oil companies have posted surprisingly good earnings results over the past twelve months. Suncor EnergyFor example, modest profit growth of 2.8% was achieved in the past twelve months, despite declining sales and oil prices. Earnings growth was strong despite poor revenue performance as the company’s operations became more efficient. This year, with oil prices rising, results could be even better.
Silly bottom line
Trade tensions can be scary, especially if they happen between you and your largest trading partner. Yet they are not the end of the world. Trade losses in one place can be made up elsewhere, and with Canada opening up both internally and externally, the future looks bright.
#Canadian #businesses #flourishing #trade #tensions