After stock sentiment worsened to start Monday morning’s trading, it reversed quickly when the U.S. delayed its tariff on Mexico by one month. Mexico agreed to protect the borders, with 10,000 troops.
In Canada, calls to slap Tesla (TSLA) with 100% tariffs put the stock in a losing position. Although the sales loss does not hurt Tesla much, the symbolic gesture does not help the electric vehicle leader. With U.S. tariffs on China at 10%, investors should also avoid EV firms in that country. That includes Li Auto (LI), Nio (NIO), XPeng (XPEV), and BYD (BYDDF).
Ontario planned to stop selling U.S. alcohol. A prolonged trade war would hurt beer firms like Ambev (ABEV), Anheuser-Busch InBev (BUD), and Constellation Brands (STZ). Consumers would likely decrease the purchase of alcohol producers, regardless of their country of origin.
The automotive sector will lose out from the trade war. Auto manufacturers have a deeply intertwined supply chain between the U.S., Canada, and Mexico. The indiscriminate tariff adds costs for Ford Motor (F) and General Motors (GM).
Car supply firms like Aptiv (APTV) and Magna (MGA) will face lower margins as costs rise and demand falls.
Mid-sized companies in the food sector will face higher costs. Instead, investors should stick with big restaurant and food supplier names. In the former, consider Domino’s (DPZ) and Starbucks (SBUX). In the latter case, Mondelez (MDLZ) and Danone (DANOY) will face minimal disruptions from tariffs.
