Diageo PLC (LSE:DGE) was among those hit in the wake of Donald Trump’s latest pledge to introduce sweeping tariffs on goods from Mexico and Canada.
Shares in the Guinness maker, which distils Don Julio tequila in Mexico and operates sites across the country, fell as much as 3.5% on Tuesday morning.
President elect Trump on Monday vowed to bring in 25% tariffs on goods from Mexico and Canada come his first day in office in January.
Trump would “sign all necessary documents to charge [a tariff] on all products coming into the United States, and its ridiculous open borders,” he said on his Truth Social platform.
XTB analyst Kathleen Brooks noted Diageo’s drop came given it was a “large exporter to the US”.
Ripples from Trump’s pledges hit a string of firms across London and Europe as well though, as fears grew of tariffs stretching to goods from elsewhere.
“Big overseas earners” JD Sports Fashion PLC (LSE:JD.) and Shell PLC (LSE:SHEL, NYSE:SHEL) dropped 2.6% and 0.5% respectively, AJ Bell analyst Dan Coatsworth pointed out, while carmaker Volkswagen Group (XETRA:VOW) also came under pressure.
“This was Trump’s most direct assertion about his tariffs plan since winning the election. It suggests that China, Canada and Mexico are in his sights,” Brooks added.
“The omission of Europe from his attacks may suggest that Europe is not a top priority, however, it is early days, and there are plenty of opportunities for Trump to direct his attention to Europe down the line.”
Jefferies analyst Mohit Kumar noted the warning of tariffs was likely an “opening move for negotiations” and that they may “not end up as bad as feared”.
“But, we will see increased uncertainty over the coming months,” Kumar continued, “tariffs will further support the view of US over rest of the world from an investment perspective”.