Consumer Staple Stocks Face Dark Period as Trump's Tariffs Threaten: P&G, Coke, Home Depot, Nike, and Apple All Targeted

As the tech, banking, and oil sectors cheer for Trump's victory, many consumer staple companies are not happy about it. The sector has been hit hardest due to its heavy reliance on imports and has become one of the top losers in the bull market.

Coke, Target, P&G, and Home Depot all fell more than 2% on Wednesday, while Nike and Dollar General were down over 3% and 5%, respectively, compared to the S&P 500's 2.5% and the Dow Jones' 3.57% stunning performances.

The concerns stem from the incoming trade war that Trump may impose when he takes office in January. Trump has vowed to implement across-the-board tariffs of 10% to 20% on all imports arriving in the United States and a 60% to 100% tariff on Chinese imports. As he advocates for U.S.-made products, the global supply chain will suffer, and eventually, consumers will pay the price. China and Mexico will be the main targets, with Mexico being more impacted due to drug trafficking concerns.

All consumer staples may be affected. Apple mainly assembles iPhones in China. Nike has manufacturing locations across China, Indonesia, the Philippines, Japan, and Vietnam.

Procter & Gamble and Unilever are among the big packaged goods companies that would be exposed if U.S. President-elect Donald Trump goes ahead with his threat to impose tariffs on Mexico, according to Reuters.

While consumer companies have publicly spoken about their investments in Mexico to create a supply chain hub for the United States, the degree to which those supply chains make them exposed to U.S. protectionism has not previously been reported.

About 10% of P&G's third-quarter shipments were from Mexico, Reuters reported. Around 2% of Unilever's sea imports into the United States come from Mexico, the data shows.

Soda producers will also be hit hard. PepsiCo, the producer of fizzy drinks and Lay's chips, has collectively invested hundreds of millions of dollars in their Mexican supply chains.

Gabriela Siller, director of analysis at Banco Base in Mexico, said exports account for 40% of Mexico's gross domestic product, and 80% of those exports go to the United States. China also exports of goods and services as percentage of GDP is 20.68%, U.S. be the main customer.