American food and beverage giants including PepsiCo (PEP), Conagra Brands (CAG), and JM Smucker (SJM) are seeking special exemptions on the import of certain ingredients from Canada and Mexico under Trump’s Tariffs. These packaged food makers have requested President Trump to avail target exemptions on import of items such as cocoa and fruits that are not available in the U.S. The news was first reported by Reuters, citing reference to a letter made by consumer products trade group, Consumer Brands Association.
Exempt Items Not Available in the U.S.
Several items such as cocoa, oats, coffee, spices, and some tropical fruits are not produced locally in the U.S. These items are key ingredients in the production of specialty foods and household goods, made by U.S. companies. The trade group is requesting the Trump administration to curate the list by carefully removing such scarce items from the Tariffs’ list. The letter stated that such a step would best protect American manufacturers and also “support (Trump’s) efforts to lower consumer inflation.”
Companies affected by Trump’s sudden policy changes are scouring to find ways to source domestically scare resources from other countries, with minimum tariff impact. Trump’s new round of tariffs on imports from China, Canada, and Mexico stand to largely impact the American packaged food manufacturers and consumer goods sector.
American consumers are already reeling from the impact of double-digit inflation in the past couple of years. Companies are complaining that consumers’ buying habits have changed drastically, which is already impacting their sales. Should the new tariffs take effect, it would increase the input costs for these companies to a large extent, which they will have to pass on to consumers. Fearing an even greater impact on demand and sales, the association has decided to make an urging request to the president to consider special exemptions.
Meanwhile, consumer goods companies, including Colgate Palmolive (CL), Procter & Gamble (PG), and Banana Boat maker Edgewell also face a big exposure to the tariffs. The companies also worry about the increased impact on their production costs that could arise from any potential punitive tariffs from the said countries.
What Stocks Are Affected by the Tariffs?
We used the TipRanks Stock Comparison Tool to see how the above-mentioned companies perform based on TipRanks’ tools. We can observe that Wall Street is currently cautious about the companies’ stock trajectories, giving them either a “Moderate Buy” or a “Hold” rating. Analysts are unsure about the full impact tariffs could have on these companies’ performance. Investors can consider investing in any of these stocks after thorough research.
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