Tariff-exposed stocks feel the squeeze as trade war heats up – Harris International Group LLC HIG Consortium

Written by Midha Singh and Kanchana Chakravage

(Reuters) -American companies companies were under pressure after another escalation in the trade war in Washington, with a new tariff for Canada and Mexico to reach profits in many sectors, including cars, space, retail and housing.

Economically sensitive stocks such as airlines and banks have led to a decrease in the main Wall Street indexes on Tuesday's new tariffs. Monday, the S& P 500 index suffered the standard in its worst day this year after confirming the American definitions. (.n)

US President Donald Trump imposed 25 % definitions on imports from Mexico and Canada, starting on Tuesday. The procedure covers more than $ 900 billion of annual US imports from the two countries.

Trump also doubled his duties on Chinese imports to 20 % to punish Beijing on an overdose of American fentanel. The cumulative duty comes at the top of the definitions of up to 25 % imposed during its first term.

Canadian Prime Minister Justin Trudeau, who was speaking a few hours later, has announced the American definitions, and announced an immediate tariff of 25 % on a Canadian $ 30 billion (20.66 billion dollars) of US imports, with the possibility of targeting 125 billion Canadian dollars in 21 days if necessary.

China has also received additional definitions of 10 % -15 % on some American imports as of March 10, while Mexico is preparing to take revenge quickly against its old ally.

Cars

US car manufacturers' shares lost Ford and Gres Motors by 1.9 % and 1.6 %, respectively, on Tuesday, as the sector is severely defined due to the integrated nature of car manufacturing between the three North American countries.

S&P GLOBAL new duties are estimated at imports from Mexico and Canada that may cost American car makers on average 10 % -25 % of the annual Ebitda.

The Trump tariff said that the Trump tariff is 25 % on imported steel and aluminum will increase the costs of industry, which represents 15 % of net shipments of iron and steel in 2024.

JP Morgan analysts also expect that the auto companies can bear the direct cost of customs tariffs on Canada and Mexico, with some pain sharing with suppliers, merchants and consumers.

They said this may cost General Motors about $ 14 billion (or all profits before the benefits and taxes that he guides to the world worldwide) and Ford about $ 6 billion (or about 75 % of profits before the benefits and taxes he guides worldwide this year).

Ford has three plants in Mexico. It was exported slightly less than 196,000 cars to North America in the first half of 2024, with 90 % of the United States, according to illiteracy of Mexico.

Stelantis is making 39 % of its vehicles in North America in Mexico or Canada, while General Motors and Ford Motor makes 36 % and 18 %, respectively, according to a report issued by Barclays.

The three GM plants in Canada produce electric trucks, heavy Chevrolet Silvrado truck, V8 engine and double clutch transport.

House builders

American home builders, who import raw materials from neighboring countries, are likely to witness an increase in costs of new definitions.

The PHLX housing index, which threw about 4.8 % so far this year, decreased on Tuesday.

The customs tariff for final products such as devices, electronics, cabinets and fixtures from Mexico and China can increase the cost of building a house.

She said that building materials companies suffer from some margin pressure from the high costs of goods, employment, shipping and new definitions may support stress margins.

Space suppliers

Canada is the best import country in the United States and the third largest space export to space in the value of the dollar, according to the Air Industries Association.

Definitions can raise costs for already unknown suppliers and their aircraft manufacturers such as Boeing. Boeing shares fell 5 %.

Canadian manufacturers also produce GULFSTREAM and Textreon engines in General Dynamics, as well as Boeing and Airbus.

Mexico contains fast -growing space centers in Queretaro and Chihuahua, and attracting adult suppliers, including Honeywell.

Steel makers

Steel imports made up about 23 % of steel consumption in the United States in 2023, according to the data of the American Iron and Steel Institute, with Canada, Brazil and Mexico the largest supplier.

Canada, which helps abundant electrical energy resources in its mineral production, was nearly 80 % of the initial aluminum imports in the United States in 2024.

Alcoa Aluminum producer Alcoa said last month that Trump's plan to impose a tariff may cost about 100,000 American jobs and will not be sufficient to be seduced by increasing production in the country. Her shares decreased by 1.4 %

The shares of the United States of steel, nucleus, steel dynamics, and Cleveland-CLIFFS decreased between 1 % and 4 %.

Airlines and hotels

Fears of the United States slowed the inventory of airlines, with a 6 % airline index for passengers decreased and turned to its worst day in more than a year.

Meanwhile, the shares of American Hilton hotel chains have decreased all over the world, and Marriott International and Hyatt hotels fell between 0.5 % and 1.6 %.

“While retailers warn, their clients warn their customers against high prices of customs tariffs, there is a feeling that people will have less estimated spending available for holidays and vacations,” said Michael Ashley Shulemann, chief investment employee in Running Point Capital.

“Likewise, companies may also reduce companies' travel to help maintain their expenses in choosing and maintain margins.”

($ 1 = 1.4523 Canadian dollars)

(Kanchana Chakravage, Medha Singh and Shivansh TiWary reports in Bangaluru;

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