- Airbus and European aerospace, food, drink, and clothing stocks fell Tuesday after the Trump administration threatened tariffs on $11 billion of European Union imports in retaliation for Airbus subsidies.
- The targeted products include nonmilitary helicopters and aircraft, seafood, cheeses, wines, fruits, sweaters, knives, pajamas, paintbrushes, and wall clocks.
- Some of the biggest losers included Rolls-Royce, Meggitt, and Associated British Foods. IAG, the owner of British Airways, slumped.
- Jefferies highlighted Rémy Cointreau, the owner of the spirit brand Rémy Martin, as especially vulnerable.
Airbus stock dropped and investors shed holdings in European food, drink, and clothing names Tuesday after the Trump administration threatened to impose tariffs on $11 billion in imports from the European Union. The duties would be retaliation for what the US says is damage done to its industry by EU subsidies to the French aircraft manufacturer Airbus, according to Reuters.
US Trade Representative Robert Lighthizer has proposed slapping tariffs on a wide range of products, according to a preliminary list published by his office. These include nonmilitary helicopters, aircraft, and airplane parts such as undercarriages and fuselages from France, Germany, Spain, and the UK.
Airbus was the second-worst performer on the benchmark Euro Stoxx 50, falling about 1.8% in Paris trading. The stock has rallied almost 40% year-to-date, helped by woes at its American rival Boeing.
- Jefferies estimated that 29% of Rémy Cointreau's sales could be affected — the maker of Rémy Martin and Metaxa is heavily reliant on exports to the US — sending the spirit maker's stock down 2%.
- IAG, the owner of British Airways, was down about 1.5%.
- Shares in Rolls-Royce, Meggitt, and Qinetiq— which supply equipment to Airbus — fell by more than 0.6%.
The EU food and beverage products subject to tariffs include certain varieties of seafood such as salmon fillets and swordfish steaks; yogurt, butter, chocolate milk, and Roquefort and cheddar cheeses; Tokay and Marsala wines; fruits such as mandarins and lemons as well as juices including peach and apricot; and olive oils and snails.
The clothing and accessories earmarked for tariffs include some types of handbags, sweaters, wool suits, pajamas, swimwear, ski-suits, and anoraks. Also on America's blacklist are various kinds of kitchen and hunting knives, microwave ovens, carpets, bed linens, blankets, binoculars, wall clocks, CCTV camera lenses, paintbrushes, yarn, household ceramics, glassware, metal and wooden tools, paper products, and parts and accessories for motorcycles and bicycles.
- The food producers Associated British Foods, Cranswick, and Greencore all saw their stocks slide by at least 0.4%.
- Drinks companies including AG Barr, Britvic, Coca Cola HBC, and Diageo all posted small declines, and shares in Burberry, Ted Baker, and Unilever also retreated.
- Jefferies estimated that no more than 6% of revenue at GruppoCampari, Pernod Ricard, Diageo, Fever-Tree Drinks, and Heineken was at risk.
The tariffs aren't set in stone, as the Trump administration plans to wait for a green light from the World Trade Organization this summer before implementing them, according to Bloomberg. Given the market fallout from a list of hypothetical tariffs, investors will be watching closely which, if any, become reality.