US tariffs of 25% on a range of Brazilian exports, with the possibility of a further 12.5% on some products, are reshaping how money flows across furniture, footwear, machinery, ethanol, and sugar supply chains. For investors, the question is which stocks might gain room to raise prices or win market share, and which could feel the squeeze as costs and volumes shift. This article walks through 3 stocks tied to this trade rift, highlighting 2 that could see potential tailwinds and 1 that may face pressure as US Brazil tensions play out in real time.

Flexsteel Industries (FLXS)

Overview: Flexsteel Industries is a US furniture company that designs, manufactures, imports, and sells a wide range of residential products, including sofas, recliners, bedroom sets, dining furniture, and outdoor lines, primarily through e-commerce and a direct sales force.

Operations: Flexsteel generates about US$458.4 million in revenue from furniture products.

Market Cap: US$390.8 million

Flexsteel Industries is positioned in the US furniture supply chain just as 25% tariffs on Brazilian furniture are set to reshape import economics, which could give a domestically based producer more room on pricing and market share. The stock trades on a P/E below both the US market and its Consumer Durables peers, even after a strong profitability recovery, which may interest investors who prioritize earnings quality and cash generation. At the same time, the company is exposed to tariff risk on its own imported inputs and to softer demand if higher furniture prices weigh on consumers. How Flexsteel balances potential tariff tailwinds with these pressures, while continuing to invest in product development and distribution, is an important factor for investors to watch.

Flexsteel’s tariff edge, US footprint, and lower P/E hint at a story the market might not be fully pricing in yet. Reviewing the 2 key rewards and 1 important major warning sign could surface the real swing factor hiding behind the headline numbers.

Tegma Gestão Logística (BOVESPA:TGMA3)

Overview: Tegma Gestão Logística is a Brazilian logistics company that moves and manages goods across the country, with a core focus on transporting and storing new and used vehicles for automakers, alongside integrated logistics services for chemicals, home appliances, and consumer goods.

Operations: Tegma generates about R$2.1b in revenue from Automotive Logistics and R$158.6m from Integrated Logistics.

Market Cap: R$2.1b

Tegma Gestão Logística sits at the heart of Brazil’s vehicle and machinery supply chains. New US tariffs that may reduce Brazil to US trade could translate into softer volumes for higher value machinery and related logistics, at a time when the company is dealing with earnings pressure and a net margin that has already slipped from 12.9% to 10.3%. The stock appears inexpensive on earnings and has a double digit dividend yield. However, that payout is not well covered by profits or free cash flow, and the business leans heavily on the automotive sector and a concentrated client base. For investors, a key consideration is whether Tegma’s cash generation, ESG credentials, and logistics upgrades are sufficient to offset trade headwinds and sector dependence before any further downturn.

Tegma Gestão Logística’s double digit dividend yield, thin coverage, and exposure to pressured trade flows raise an obvious question: how sustainable is this setup if volumes or cash flow slip further? The 3 key rewards and 1 important major warning sign could highlight the pressure points investors are missing.

Caleres (CAL)

Overview: Caleres is a global footwear company that designs, sources, manufactures, and sells a wide range of branded and licensed shoes across athletic, casual, and dress categories through its Famous Footwear retail chain, branded wholesale operations, and multiple e-commerce sites.

Operations: Caleres generates about US$1.49b in revenue from Famous Footwear and US$1.38b from its Brand Portfolio segment, partly offset by US$58.3m of eliminations and other items between segments.

Market Cap: US$398.0m

Caleres stands out in this tariff focused list because it is a large US footwear supplier that could see less competition from Brazilian imports just as its own valuation looks compressed, with the stock trading at a very low P/S and well below some estimates of fair value. At the same time, profit margins have been under pressure, earnings growth recently declined sharply, and the dividend is not comfortably covered by earnings, so any hit to cash flow from new tariffs or weaker consumer demand would matter. Management has been actively adjusting sourcing and has a long history in footwear. Together with ongoing buybacks and recent EPS guidance, this gives investors reasons to look more closely at how this tariff backdrop could reshape the risk reward trade off.

Caleres looks like a compressed P/S story where tariffs, sourcing shifts, and buybacks may be masking the real setup. The 2 key rewards and 4 important warning signs (1 is major!) could reveal the twist that changes how you see the stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.