The recent imposition of tariffs by the United States has been challenging the consumer sector. These measures, announced during the so-called “Liberation Day,” include a 10% tariff on all imports and additional tariffs specific to certain countries: 34% to China, 32% to Taiwan, 46% to Vietnam, and 20% to the European Union. These actions intend to counteract alleged non-tariff barriers and unfair trade practices identified by the U.S. in these countries. Conversely, as a result, the main macroeconomic variables have not shown much in the short and medium term, even showing declining signs.
Affected Sectors and Companies
Companies highly dependent on the U.S. market and importing products or raw materials from countries affected by tariffs face difficult situations. For example, the footwear and sports fashion sector, with companies such as Nike, Lululemon, or On Holding, could increase costs due to production in countries such as China, Vietnam, and Southeast Asia, i.e., cost increases and, ultimately, price increases for consumers.
Likewise, the alcoholic beverage industry, represented by firms such as Remy Cointreau and Pernod Ricard, could see their exports to the United States affected, both in terms of profit margins and competitiveness in the U.S. market.
Economic Outlook
These tariff measures could lead to higher inflation and slower economic growth, particularly for the United States and the European Union, potentially growing below 1% and increasing the risk of recession. In addition, the generated uncertainty may also affect consumer confidence, reducing spending and negatively affecting the consumer sector.
Opportunities for Investors
Despite the challenges, investors could leverage this new context. Companies with diversified supply chains or production located in markets less affected by tariffs could gain competitive advantages. In addition, sectors less exposed to trade tensions, such as technology or services, could offer attractive investment opportunities therein.
Defensive Consumption is highlighted as another more resilient area, as it comprises producers of daily necessities such as food and health products. These companies have a history of stable growth and are less sensitive to macroeconomic and business fluctuations.
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Source: Renta4Banco