Why Beer, Tequila, Avocados, Cars, iPhone Prices Could Rise: Trump's Tariffs On Canada, Mexico, China To Hurt Several Sectors

President Donald Trump's announced tariffs on Canada, Mexico and China could impact many sectors and see retailers and companies raising prices on consumers to offset the higher prices.

Here's a look at the sectors and stocks that could be hurt the most by Trump's tariffs and retaliatory efforts by the three countries back on the U.S.

What Happened: Trump announced 25% tariffs on imports from Canada and Mexico along with a 10% tariffs on items imported from China. Trump and Mexican President Claudia Sheinbaum announced Monday the U.S. tariffs on Mexico have been paused for one month.

Canada fought back with retaliatory measures on U.S. imports.

Trump said he spoke with Canadian Prime Minister Justin Trudeau and plans to speak to the leader again at 3 p.m. ET Monday.

The tariffs were met with anger in Canada where sports fans booed the playing of “The Star-Spangled Banner,” the U.S. national anthem, at NBA and NHL sporting events over the weekend, as reported by Deadline.

NBA and NHL games involving teams from both countries typically play national anthems ahead of games.

Goods and Sectors Impacted: Here's a look at the top imports from Canada, Mexico and China that will be impacted if the tariffs stick.

Beer and Spirits: One of the companies that could be hit hardest by the tariff news is Constellation Brands Inc STZ, an alcohol company that holds the exclusive U.S. license for several of the top imported beer brands in America. Constellation imports brands like Modelo, Corona and Pacifico from Mexico, where they are brewed by Grupo Modelo, which is a unit of Anheuser-Busch InBev BUD.

Modelo is the top imported beer in the U.S., with Corona ranking second. Heineken and Dos Equis XX, which are imported by Heineken USA, a unit of Heineken NV HEINY, ranked third and fourth on the list of top imported beers. Dos Equis is manufactured in Mexico and imported to the U.S.

Constellation stock is down around 40% since it was flagged as a company to see pressure from tariffs back in November.

The U.S. is also a large importer of tequila, a sector that could be hit hard by tariffs on Mexico.

Automotive: Several automotive companies like Ford Motor Co F, General Motors Co GM and Honda Motor Co Ltd HMC have sub-$30,000 vehicles that are partially or fully built in Mexico and Canada. Tariffs on these countries could quickly make these sub-$30,000 vehicles cost more for consumers and eliminate options in the popular starting price point.

Avocados: American imports over 80% of its avocados from Mexico, which could lead to higher prices ahead of Super Bowl Sunday on Feb. 9, as reported by the New York Post. Stocks that could be impacted by higher avocado costs are Mission Produce Inc AVO, Calavo Growers, Inc. CVGW and Limoneira Co LMNR.

Fruits and Vegetables: Canada is the largest supplier of cherry tomatoes for the U.S., which could see higher produce costs for consumers and restaurants.

Smartphones: China is one of the largest exporters of smartphones to the U.S., accounting for an estimated 87% of production according to the report. The iPhone from Apple Inc AAPL has 95% of production assembled in China as of 2023.

Toys: The Toy Association industry group estimates that 75% of all imported toys come from China, making the sector one area that could be significantly hit by higher tariffs. Hasbro Inc HAS and Mattel Inc MAT are two stocks that could see pressure with the tariffs impacting one of their key sectors.

Clothing: Imported clothes from e-commerce companies including Shein and PDD Holdings – ADR PDD brand Temu will see higher prices with the tariff on China. Canadian clothing companies Aritzia and Lululemon Athletica LULU will also be impacted by the tariff news.

The footwear portion of the clothing sector could see the biggest impact with the Footwear Distributors & Retailers of America estimating that 99% of shoes sold in the U.S. are imported. Nike Inc NKE could be among the companies hit hardest by the tariff news.

Construction: The American Iron and Steel Institute estimates that 25% of American steel comes from Canada and 12% comes from Mexico, which means steel prices could go up. Canadian lumber is also a large export to the U.S., which makes up around 30% of all lumber the country uses. Other construction items like drywall, lime and gypsum come from Mexico, which will put more pressure on homebuilders. The tariffs could lead to home prices going up and putting further pressure on the sector.

Oil: The U.S. is a large importer of Canadian oil. While oil will only see a 10% tariff compared to the 25% on other Canadian goods, the sector could likely see a large impact. Companies like Suncor Energy Inc SU, Enbridge ENB, Canadian Natural Resources CNQ and TC Pipelines TRP could face significant impacts from the tariffs and a potential blow to the sector.

Transportation: Railway company Canadian Pacific Kansas City Limited CP and trucking companies Old Dominion Freight Line ODFL and Knight-Swift Transportation Holdings KNX could be impacted by the tariffs and negative impact on trade between the United States and Canada.

Retailers: Dollar stores and discount retailers like Dollar Tree DLTR could be impacted by the tariffs. Executives warned of the potential impact in late 2024 with the goal of offsetting the higher prices with new product sizes and negotiating lower costs with suppliers. The company also said it would consider stopping the sale of several items due to the planned tariffs.

Price Actions on Monday at publication: The iShares MSCI Canada Index Fund EWC is down 1.46% to $40.62.

The iShares MSCI Mexico ETF EWW is up 2.12% to $50.02.

The iShares MSCI China ETF MCHI is down 0.29% to $48.27.

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