By
Reuters
Revealed
November 8, 2024
Procter & Gamble and Unilever are amongst huge packaged items firms that might be uncovered if U.S. President-elect Donald Trump goes forward with a menace to impose tariffs on Mexico, knowledge seen completely by Reuters exhibits.
Reuters
Trump warned days earlier than his win in opposition to Democrat nominee Kamala Harris that he would hit Mexico and China with 25% tariffs until each governments moved to cease the movement of fentanyl into america.
Whereas client firms have spoken publicly about their investments in Mexico to create a provide chain hub for america, the diploma to which these provide chains make them uncovered to U.S. protectionism has not beforehand been reported.
About 10% of P&G’s third-quarter shipments had been from Mexico, in line with invoice of lading figures shared completely with Reuters by import knowledge supplier ImportYeti. Round 2% of Unilever’s sea imports into america come from Mexico, the information exhibits.
Unilever and P&G declined to remark. The invoice of lading knowledge doesn’t embrace air imports or the truckloads of products firms carry into america through street.
Each firms and different huge client teams akin to Pepsico, producer of fizzy drinks and Lay’s chips, have collectively invested lots of of tens of millions of {dollars} of their Mexican provide chains.
That has led some traders since Trump’s win on Wednesday to look at Unilever and its friends’ publicity to Mexico and China, the place these firms have manufacturing bases and likewise derive a bit of income from gross sales.
Gabriela Siller, director of study at Banco Base in Mexico, stated exports account for 40% of Mexico’s gross home product and 80% of them go to america.
Levying the tariffs on staple items like packaged meals and cleaning soap may increase costs of People’ on a regular basis objects if firms are pressured to soak up the upper prices.
Throughout Trump’s first time period within the White Home, america imposed deep tariffs on items from a number of nations.The commerce warfare and subsequent Covid-19 pandemic highlighted how reliant international firms are on Chinese language manufacturing and provide chains, prompting corporations – significantly those who make packaged items – to show to “nearshoring”, or producing items nearer to the place they’re offered.
Unilever and Pepsico and different client firm executives have previously talked publicly about shoring up their Mexico infrastructure to assist assist international provide chains.
“P&G and other CPG (consumer packaged goods) companies that do import, they may be affected but that really remains to be seen,” stated Michael Ashley Schulman, chief funding officer at Operating Level Capital.
P&G, the world’s largest private items and homecare firm with manufacturers together with Gillette, Ariel and Head & Shoulders, stated in 2019 it will make investments $4 billion in Mexico within the subsequent two years.
The invoice of lading knowledge exhibits P&G ships in much more product from Mexico than Unilever or Pepsico, however has lowered sea imports from that nation since 2017.
Within the third quarter of this 12 months, P&G imported at the least 4.5 million kilograms of product by sea, down from at the least 7.9 million kilograms within the third quarter of 2017 early in Trump’s first presidency, in line with the information.
Unilever, within the newest quarter, imported by sea over 2 million kilograms of product like Pond’s face cream and Rexona deodorant into america, in line with the information.
That was up from at the least 1.4 million kilograms of product imported within the third quarter of 2017, the information confirmed.In distinction, Unilever’s imports from China fell by about 24% from the third quarter of 2017 to at the least 296,000 kilograms in July-September this 12 months, in line with the figures.
Unilever stated final 12 months it will construct a producing plant within the northern Mexican border state of Nuevo Leon as a part of a $400 million funding within the nation over the following three years.
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