Hammond Power (HPS-A) lost 6% today as the market weighs the impact of Trump’s expansion of steel & aluminum tariffs, which should hit transformers and add more margin pressure in the near-term.

On a longer time horizon, this could actually work out in Hammond’s favour. The company already did its annual price increase in April, but management highlighted they’d react to the market environment if needed.

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… and we’ll have to take decisions going forward based on how we see material costs rising, but that would be outside our normal course of operations.

Adrian Thomas (CEO) - HPS Q2’25 call

The demand for transformers isn’t going anywhere, and with the majority of manufacturing done outside America, this latest move by Trump should raise the floor on prices - as producers try to maintain their unit economics.

It would be unusual for manufacturers to lower prices in the future, so if tariffs are relaxed… the door could be open for margins to take another step higher.

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