Ford, Nike and Constellation Brands At Risk Of Crashing on Trump's Tariffs

Investing

New trade war between the United States and China, various tariffs, illustration of American and Chinese flags facing each other, trade war concept

Published: February 27, 2025 11:44 am

President Donald Trump is shaking up the world economy. His tariff plan proposes a 25% tariff on imports from Mexico and Canada, 10% to 60% on Chinese goods, and 25% tariffs on goods coming from the 27-member nation European Union.

Trump’s aim is to boost U.S. manufacturing by leveling the playing field, cutting the trade deficit, and bringing jobs back home. Trump says this will “Make America Great Again” by reducing reliance on foreign products and protecting American workers, especially in states like Michigan and Ohio.

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Trade tensions are rising globally as President Trump has promised to impose tariffs on the U.S. trading partners around the globe.
Numerous businesses and industries could feel the effects of higher costs tariffs will cause, potentially disrupting their operations.
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He has said he wants to impose duties on countries in the amount they charge U.S. companies to export goods to their markets.

It might create factory jobs, but it risks higher costs for households, supply chain chaos, and a global trade war, potentially shaving 0.5% to 1% off U.S. gross domestic product (GDP), according to Goldman Sachs.

It’s a bold strategy, but one fraught with risk, with both winners and losers. The following three stocks face some of the greatest risk from Trump’s trade salvo.

Ford (F)

Ford Upends Its Electric Vehicle Plan — With much of its production in Canada and Mexico, Ford is especially vulnerable to Trump’s trade rhetoric

Ford (NYSE:F) is one of America’s biggest carmakers, and it finds itself in the tariff crosshairs due to its heavy reliance on Mexico and Canada. Bank of America says the automaker makes 15% to 20% of its vehicles in Canada and 30% to 35% in Mexico.

Trump’s 25% tariffs could add billions in costs, with analysts estimating $50 billion for the auto industry as a whole, which could force Ford to raise prices on F-150s and Mustangs or move production back to the U.S., which is slow and expensive.

The good news is, it might push Ford to invest in U.S. plants, creating jobs and aligning with Trump’s goals. It has the potential to boost F stock if consumers stay loyal. But the bad could be brutal as higher prices kill demand, especially with interest in electric vehicles and hybrids slowing.

Retaliation from Mexico and Canada, for example, by taxing U.S. auto exports, could cut Ford’s profits 5% to 10%, says Goldman Sachs. Shares have already dropped 5% since the tariff news, risking a 15% to 20% dive if trade wars escalate.

Constellation Brands (STZ)

With Mexico accounting for more than 80% of U.S. beer imports, Corona owner Constellation Brands is a high-risk stock

Constellation Brands (NYSE:STZ) is the world’s largest wine producer and the largest beer importer in the U.S. Its Mexican beer, Corona and Modelo, face a devastating hit from Trump’s tariffs.

Mexico is responsible for 83% of U.S. beer imports due to the dominance of Corona and Modelo, and nearly half of all spirits imports by volume, especially tequila, data from Bank of America shows. A 25% tariff could spike beer prices, squeezing margins and sparking retaliation, like Canada pulling U.S. alcohol.

However, higher prices might push sales of domestic brands or non-alcoholic options, and Constellation’s $31 billion market cap and $2.5 billion cash flow could weather short-term hits if it cuts costs. Yet the risks are crushing.

Because of Constellation Brands’ niche luxury status, it could falter if spending tightens, making an investment a high-stakes gamble.

Nike (NKE)

With China still accounting for a large percentage of Nike’s products, higher tariffs could cause the price of its sneakers to soar

Sneaker giant Nike (NYSE:NKE) is also especially vulnerable to Trump’s threat of 10% to 60% tariffs on China. That’s because it is estimated Nike sources 20% to 30% of its products, such as fabrics and shoes, from China. Higher import costs could raise sneakers priced at more than $100, hitting margins and U.S. sales.

Of course, Nike could shift production to Vietnam or India, or align itself with Trump’s reshoring push. The athletic wear company’s China business might pivot to U.S. growth if tariffs spur domestic manufacturing.

Still, the outlook is grim. Retaliation from China could hurt its $6 billion China revenue, and consumer pushback on pricier Air Maxes could shrink demand. Surprisingly, after initially dropping around 3% on the news, NKE stock is up 5% since. It still risks a 15% to 20% decline if inflation or trade wars sap spending. While Nike’s brand power might hold, it’s a risky bet if global supply chains buckle.