Possibility of fairer trade could lead to stock market bargains

If you've been reading my column for a while, then you know I have an addiction to things that move, especially things that move off-road. Four wheelers, motorcycles and mountain bikes are all important parts of my life. I love to ride, always have.

All riders have riding buddies. Kenny is one of my good riding buddies, we've had some fun adventures together. Kenny likes to call me two days before he leaves on a road trip to go riding, asking me to go. My life is not that spontaneous, and I usually must pass. This time Kenny called me to go riding two full months ahead of time -- a miracle. He invited me to go on a snowmobile trip up north.

I don't ride snowmobiles, but always wanted to. I was excited for the invitation. Kenny said I could borrow one of his sleds for the trip, but once the subject was breached, I started musing about buying a snowmobile of my own. I went down the snowmobile rabbit hole, which is very deep.

I have a personal rule, kind of like a law of physics: money that goes into riding toys must always stay in riding toys. When my kids went to college, I had sold their four wheelers as they didn't seem to have any ongoing interest in riding them. I put the money into a secret cash hoard I keep for the riding toy fund. I wouldn't say it was burning a hole in my pocket, but I knew it was there. My snowmobile money.

So, I went to Facebook marketplace to look for used snowmobiles. With weak snowfall for the last two winters, there were a lot of used snowmobiles for sale. But once the web stalking bots discovered me looking for snowmobiles, my various online feeds filled up with ads for new snowmobiles. I didn't plan on buying new, but it couldn't hurt to look.

In a world of warming winters, making snowmobiles is not a great business. There are four major snowmobile makers, two American, one Japanese and one Canadian. One of the American makers was going out of business, the Japanese maker had decided to stop making sleds, leaving one strong American maker and the Canadians. Both surviving companies made great snowmobiles filled with modern technology. But something seemed odd with the pricing.

The price of the Canadian snowmobile was almost a whopping 40% lower than the comparable American snowmobile. 40%! So cheap that a new Canadian sled was only a little bit more than a comparable used sled three to five years old on Facebook. I bought a new Canadian snowmobile. It was a no brainer.

Kenny has strong opinions on snowmobiles, and politics. He doesn't like the Canadian snowmobile company. When I announced my purchase, he called me to rant. He went on a tirade saying the Canadian government was subsidizing the snowmobile company to give it an advantage and drive the remaining American company out of the sled business and dominate the market. He said I was embracing "Canadian socialism." I let him rant. I got a great deal on an amazing sled and was willing to take the heat from his conspiracy theories. I dismissed his bluster as rider bias -- we all have it. That is, until this week.

On Wednesday afternoon the Trump administration revealed its tariff plan, called "Reciprocal Tariffs." The press conference included a long list of countries which were using claimed tariffs or "currency manipulation" to levy competitive advantage over imported American products. The list was shocking, so shocking I was skeptical. How could some of these countries be penalizing American goods at these levels -- some as high as 95%, many from our international "friends" over 50%? I suspected political spin at work.

I don't like tariffs. Free trade among friends seems like the best path to international peace. Wall Street apparently doesn't like tariffs either. As I write this, right after the new tariff plan was revealed, Dow futures had dropped 1,000 points. After-hours trading in shares of some major global corporations are down almost 10%.

International commerce is endlessly complicated. Tariffs, duties and currency exchange all play a part. Was the Trump administration cherry picking in order to form its interpretation of "reciprocal"? The press conference charts seemed too simple, nothing about this press conference felt right, and I don't like losing money in disrupted financial markets.

Then I remembered the snowmobile. How could the Canadian sled be so much cheaper than the American version of the same product? Was this price differential a result of the currency manipulation and unfair subsidies being talked about? Was Kenny right? Candidly, I don't know, but maybe President Trump's chart wasn't pure spin after all.

When the stock market opens tomorrow, maybe it'll be a train wreck. But maybe, just maybe, if our international trading partners are subjected to these reciprocal tariff policies, some will decide to change their own practices. The result could be even fairer trade down the road, and fairer trade could mean stronger growth for American companies. Maybe I'll do a little bargain shopping for stocks in the morning.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.