A Big Ruling Is Looming on President Trump's Tariffs. This Magnificent ETF Can Help You Hedge Against Any Potential Stock Market Turmoil.

Tariffs are a surcharge placed on physical products imported into the United States, and are designed to make domestic businesses more competitive with their international counterparts. In April last year, President Donald Trump announced sweeping tariffs on most of America's trading partners, which contributed to a rapid 19% decline in the S&P 500 stock market index as investors weighed the potential impact on the economy.

Trump has since pared back many of the harshest tariffs, but he continues to surprise the markets with new potential surcharges, like last week, when he threatened a 25% import levy on any country doing business with Iran. However, a major case before the Supreme Court right now will determine whether a large portion of Trump's tariffs -- namely those issued under the International Emergency Economic Powers Act (IEEPA) -- are legally enforceable.

An official ruling could come as early as Tuesday or Wednesday this week, potentially triggering volatility in the stock market. Investors might be able to minimize their exposure by purchasing the iShares U.S. Tech Independence Focused ETF (NYSEMKT: IETC), which is an exchange-traded fund (ETF) operated by BlackRock that invests exclusively in American technology companies that produce a growing amount of their products and intellectual property domestically.

Image source: Getty Images.

A portfolio of tariff-resistant tech stocks

The iShares ETF invests in companies that have a majority of their technological capabilities, revenues, and production in the U.S. Over time, these companies are producing more of their goods and services using domestic value chains that are not easily disrupted by sudden changes in global trade policies.

As I mentioned earlier, tariffs mainly apply to physical imports, so digital products usually aren't affected. That's why the iShares ETF has parked 42.4% of its portfolio in the software sector alone. A further 25.1% of its portfolio is allocated to the semiconductor sector, which might seem strange considering some of the world's most advanced chips are manufactured in countries like Taiwan and imported into the U.S.

However, given the importance of semiconductors and equipment to emerging technologies like artificial intelligence (AI), the Trump administration has exempted many chip imports from its surcharges. A 25% tariff on some semiconductor imports was imposed as of Jan. 15, 2026, but notably, chips earmarked for U.S. data centers (where most AI development happens) remain exempt. In fact, all semiconductor equipment used to help the U.S. build out its technology supply chain is exempt.

The iShares ETF holds 87 stocks, but its top 10 positions alone account for 60.3% of the value of its portfolio. They include some of the most prominent names in the software and semiconductor sectors.

Data source: iShares. Portfolio weightings are accurate as of Jan. 14, 2026, and are subject to change.

The iShares ETF beat the S&P 500 in 2025

The iShares ETF returned 19.1% last year, beating the S&P 500, which climbed by 16.4%. Simply put, it proved its ability to outperform the broader market in the face of Trump's aggressive trade policies, thanks to its unique tariff-resistant portfolio.

But 2025 wasn't a one-off. The iShares ETF was established in 2018, which was during Trump's first term in office. It has since produced a compound annual return of 20.7%, comfortably outpacing the S&P 500, which gained 13.7% per year over the same period.

With all of that said, trade policy is constantly changing, so investors shouldn't bet the farm on this ETF. Instead, it might be a great addition to a diversified portfolio, potentially helping increase overall returns as the global commerce landscape shifts.

It's impossible to know which way the Supreme Court will rule on Trump's IEEPA tariffs, but even if they are deemed illegal, the administration has outlined other strategies to collect surcharges on imported products. Therefore, the iShares ETF certainly looks like a good place to park some money.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, International Business Machines, Microsoft, Nvidia, Oracle, Palantir Technologies, and Salesforce. The Motley Fool recommends BlackRock and Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.