By George Glover

Car manufacturers, beermakers, and sportswear brands were among the stocks tumbling early Monday as President Trump's trade war escalated.

Levies on Canada and Mexico will come into effect Tuesday and both countries said they would hit back at the U.S. with tariffs of its own.

Ford Motor Co., Chevrolet and Cadillac owner General Motors Co., Modelo and Corona maker Constellation Brands and athletic apparel designer Lululemon Athletica were among the benchmark S&P 500 index's biggest losers ahead of the opening bell, as investors fretted that the trade war between the U.S. and its neighbors would hammer earnings in certain sectors.

President Donald Trump imposed 25% tariffs on Canada and Mexico and 10% tariffs on China on Saturday. All three countries have signaled that they will retaliate.

Canada's Department of Finance said in a press release Saturday that it would be imposing 25% levies on 155 billion Canadian dollars ($106 billion) worth of goods imported from the U.S.

The first phase of Canada's countermeasures will come into force Tuesday and include tariffs on about $20 billion worth of goods such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper. The second phase will be imposed after a 21-day public comment period and cover $85 billion worth of goods including passenger vehicles and trucks, electric vehicles, steel and aluminum products, certain fruits and vegetables, aerospace products, beef, pork, dairy, trucks and buses, recreational vehicles, and recreational boats.

President Claudia Sheinbaum said in a post on X that Mexico would impose tariffs of U.S. goods but didn't name specific sectors, and China said it would lodge a complaint with the World Trade Organization.

Auto makers looked set to lead a broad and deep selloff on Monday as U.S. markets felt the brunt of the developing trade war. GM stock plunged 6.1%, making it the S&P 500's worst performer, while Ford shares dropped 4.3%. Tesla slid 2%, and fellow EV manufacturer Rivian Automotive was down 3.2%.

Beer and winemaker Constellation, which owns the U.S. rights to Modelo and Corona, tumbled 5.4% ahead of the opening bell. Last month, Barron's argued that the company's dependence on Mexican lagers made it especially vulnerable to Trump's tariffs. Molson Coors and Bud Light owner Anheuser-Busch InBev both fell 2.3%.

Lululemon stock down 3.2% in early trading, while Nike dropped 2.5% and shares in Hoka running shoes owner Deckers Outdoor fell 2%.

Write to George Glover at george.glover@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 03, 2025 06:27 ET (11:27 GMT)

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