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Investing.com — The U.S. commerce panorama is beneath scrutiny as buyers brace for potential tariff escalations beneath a brand new administration.
Barclays (LON:BARC) analysts on near-total visibility into commodities crossing U.S. borders, mentioned Mexico’s rising prominence because the U.S.’s largest buying and selling associate raises considerations in regards to the impression of potential import duties.
The 2019 U.S.-China commerce warfare serves as a reference for potential challenges.
Analysts notice declines in home rail and trucking volumes, in addition to contractions in international freight markets, throughout that interval. Whereas tariffs may disrupt commerce with Canada and Mexico, commerce amongst North American companions expanded beneath the prior U.S.-Mexico-Canada Settlement.
Tariff escalation with China would probably hit international freight suppliers and Western railroads hardest, significantly these reliant on grain exports. Broader actions affecting Europe or North America may disrupt ground-based transportation sectors like trucking and railroads.
Client items stay a focus. Electronics, accounting for one-third of U.S. shopper items imports, are primarily sourced from China and Mexico. Attire and footwear imports have shifted considerably from China to Southeast Asia lately. Firms like Ralph Lauren (NYSE:RL) have lowered reliance on China, with sourcing dropping to single digits as of late 2024.
Industrials additionally face dangers. Sectors closely reliant on imports from Mexico, China, and Canada embody automotive parts, HVAC gear, and energy instruments. Firms like Stanley Black & Decker (NYSE:SWK) and Rockwell Automation (NYSE:ROK) might even see pricing pressures, whereas internet exporters like Honeywell (NASDAQ:HON) and 3M may fare higher.
European logistics corporations, too, have publicity to trans-Atlantic and trans-Pacific commerce lanes. Potential disruptions, comparable to port strikes, may amplify challenges for international provide chains.
