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The stock pulled back a lot less than its peers, but I believe there could be some major downside ahead once more information is released about Trumps border tax. Donald Trump is determined to make America great again by trying to encourage companies to manufacture parts and products locally. Trump threatened German car makers with a 35% import tariff, and I believe he will slap on harsh taxes because he has all of the bargaining power right now. Trump isnt afraid to speak his mind, and you can count on him to turn rhetoric into a policy, even if that means disaster for foreign companies that wish to export goods to the U.S. Magna could get dinged with a similar tax for its U.S. exports, and that would be an absolute disaster for the company since a huge chunk of their business comes from the U.S. Its unclear how large the tax will be for Canadian auto parts makers, but if its anywhere close to the tariff that could be placed on German car makers, we could see a huge correction in the price of Magna and its peers. The stock looks cheap. Could the dip actually be a buying opportunity?
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