President Donald Trump has made tariffs the centerpiece of his economic policy agenda, and his tariff policies have gotten mixed reviews from investors and economists.
Tariffs can help U.S. businesses compete with lower-cost international businesses and encourage American companies to manufacture products domestically. However, they also force U.S. companies to pay higher prices for imported goods and components, creating inflationary pressures. Trump has historically threatened to impose incredibly high tariffs on U.S. trading partners, but he has often delayed or canceled those threats or negotiated for much lower rates before they go into effect.
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With the next round of Trump’s tariffs set to go into effect on Aug. 1, his reputation to be more bark than bite on tariffs has some traders looking for ways to play the “Trump Always Chickens Out” (TACO) trade. Here are eight TACO trade stocks to buy that could get a big boost if Trump delays, reduces or cancels tariffs, according to Morningstar analysts:
| Stock | Implied change from July 21 close |
| Marvell Technology Inc. (ticker: MRVL) | 23.2% |
| Target Corp. (TGT) | 32.7% |
| GE HealthCare Technologies Inc. (GEHC) | 20% |
| Lululemon Athletica Inc. (LULU) | 36.6% |
| Best Buy Co. Inc. (BBY) | 31.4% |
| Gap Inc. (GAP) | 35.7% |
| Wayfair Inc. (W) | 24.1% |
| Littelfuse Inc. (LFUS) | 27.1% |
Marvell Technology Inc. (MRVL)
First among the Trump TACO stocks is Marvell Technology, a semiconductor company that provides solutions for the data storage, communications and consumer markets. Industrial, hardware and semiconductor stocks like Marvell often have complex, global supply chains that involve many of the countries in Trump’s tariff crosshairs. Analyst William Kerwin says investors can look beyond tariffs and focus on Marvell’s custom artificial intelligence (AI) compute portfolio and the bullish long-term outlook for the custom chip market. Kerwin says Marvell is extremely profitable, has impressive growth potential and has a wide range of networking chip products. Morningstar has a “buy” rating and $90 fair value estimate for MRVL stock, which closed at $73.06 on July 21.
Target Corp. (TGT)
Target is one of the largest U.S. discount retailers, which are generally considered safe, defensive investments. However, new trade barriers could still disrupt Target’s supply chains and weigh on margins in the near term. Nevertheless, Target has a long track record of successfully navigating various economic scenarios and has even raised its dividend for 53 consecutive years. Analyst Noah Rohr says 2025 has been a challenging year, but he projects low-single-digit same-store sales growth for Target in the long term. Morningstar has a “buy” rating and $135 fair value estimate for TGT stock, which closed at $101.71 on July 21.
GE HealthCare Technologies Inc. (GEHC)
GE HealthCare Technologies is a global medical technology, digital solutions and pharmaceutical diagnostics company that was spun off from General Electric in 2023. GE HealthCare and other medical technology and devices stocks have international manufacturing facilities and rely on specialized, imported components. Analyst Jay Lee says escalating tariffs are a threat to GE HealthCare’s supply chain in the near term, but he believes the stock’s current valuation reflects an overly pessimistic outlook given its long-term growth prospects and its position as a global leader in medical imaging. Morningstar has a “buy” rating and $89 fair value estimate for GEHC stock, which closed at $74.16 on July 21.
Lululemon Athletica Inc. (LULU)
Lululemon Athletica is a specialty retailer of athletic apparel and a popular healthy lifestyle brand. Lululemon and other apparel and accessories companies rely on overseas factories in Asia, particularly in countries such as China and Vietnam. Analyst David Swartz says Lululemon is facing stiff competition in its leading product categories, but it has benefited from strong growth in “athleisure” fashion and has built a valuable premium brand that gives it significant pricing leverage. Swartz is also bullish on Lululemon’s focus on e-commerce, product innovation and international expansion. Morningstar has a “buy” rating and $305 fair value estimate for LULU stock, which closed at $223.21 on July 21.
Best Buy Co. Inc. (BBY)
Best Buy is a leading North American consumer electronics and entertainment software retailer. Best Buy and other specialty retailers that import a significant amount of merchandise face cost headwinds if tariffs rise, which could force them to choose between raising prices on struggling consumers or sacrificing profit margins. Rohr says Best Buy’s 2025 share price weakness stems from tariff uncertainty, but the company’s underlying business has been solid. He says Best Buy’s strategy of improving operational efficiency and focusing on customer service will create long-term value. Morningstar has a “buy” rating and $87 fair value estimate for BBY stock, which closed at $66.19 on July 21.
Gap Inc. (GAP)
Gap is a casual apparel and accessories retailer that owns Old Navy, Gap, Banana Republic and other popular store brands. While Gap has moved to diversify away from sourcing from China in recent years, it still relies heavily on imports from countries like Vietnam, India and Indonesia. Swartz says Gap’s performance has been inconsistent, but it has cost advantages over competitors and significant liquidity. He says Gap’s crown jewel is its Old Navy brand, which he believes can reach $10 billion in annual sales by 2030. Morningstar has a “buy” rating and $28 fair value estimate for GAP stock, which closed at $20.63 on July 21.
Wayfair Inc. (W)
Wayfair is an online retailer of home furnishings and related products and is the owner of brands such as Joss & Main, AllModern and Birch Lane. Wayfair imports products from a variety of global suppliers, particularly in China and Vietnam. Analyst Jaime Katz says Wayfair’s marketplace model insulates the company from direct tariff hits, but it will still need to manage its take rate if suppliers raise costs due to tariffs. Katz says Wayfair’s strengths are its product selection and extensive logistics network that allows for faster delivery. Morningstar has a “buy” rating and $70 fair value estimate for W stock, which closed at $56.42 on July 21.
Littelfuse Inc. (LFUS)
Littelfuse is an industrial technology manufacturing company that designs, manufactures and sells electronic components, modules and subassemblies. The company reportedly imports from suppliers around the world, including China, Singapore and Taiwan. Kerwin anticipates a rebound in electronics and industrial demand in the second half of 2025 and is optimistic about Littelfuse’s exposure to secular growth trends in the transportation and industrial markets. He says the company is prioritizing attractive growth themes such as efficiency, safety and connectivity. Morningstar has a “buy” rating and $295 fair value estimate for IFUS stock, which closed at $232.18 on July 21.
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The TACO Trade: What it Means and 8 Ways to Play It originally appeared on usnews.com
