{"id":20647,"date":"2017-01-28T09:04:29","date_gmt":"2017-01-28T09:04:29","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=20647"},"modified":"2017-01-28T09:04:29","modified_gmt":"2017-01-28T09:04:29","slug":"u-s-supermarket-shares-dip-after-trump-threatens-mexico-trade","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/u-s-supermarket-shares-dip-after-trump-threatens-mexico-trade.html","title":{"rendered":"U.S. supermarket shares dip after Trump threatens Mexico trade"},"content":{"rendered":"
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U.S. supermarket shares dip after Trump threatens Mexico trade<\/span><\/strong><\/span><\/h2>\n

U.S. supermarket shares dip after Trump threatens Mexico trade:-<\/strong> Shares of U.S. supermarket operators fell on Friday as President Donald Trump kept up his criticism of Mexico, which is a major supplier of produce and other foods for U.S. consumers.<\/span><\/p>\n

A day after the White House suggested that the United States could impose a 20 percent tax on goods from Mexico, shares of Wal-Mart Stores (WMT.N) and Kroger Co (KR.N) fell more than 1 percent, while Whole Foods Market (WFM.O) dropped 2.8 percent.<\/span><\/p>\n

Trump on Friday repeated statements that Mexico, a major exporter of vegetables, fruits and beer, has taken advantage of the United States. Mexico, he said, “beat us to a pulp,” deepening worries about a crisis between the two trading partners.<\/span><\/p>\n

On Thursday, Mexican President Enrique Pena Nieto scrapped a planned trip to Washington to meet Trump, who has repeatedly demanded that Mexico pay for a wall on the U.S. border to halt illegal immigration. The White House later said the potential 20 percent tax could be used to pay for the wall.<\/span><\/p>\n

Mexico was the second-largest supplier of agricultural exports to the United States in 2015, according to the Office of the United States Trade Representative, or USTR.<\/span><\/p>\n

Mexican agricultural exports to the United States in 2015 totaled about $21.6 billion, up 191 percent from 1993, before the two countries and Canada cemented the North American Free Trade Agreement, according to the USTR.<\/span><\/p>\n

Less than 1 percent of Hass avocados – the main ingredient in guacamole – sold in the United States so far in 2017 were domestically grown, with 93 percent arriving from Mexico, according to the Hass Avocado Board.<\/span><\/p>\n

The United States consumes nearly all of its own tomatoes, exporting just 6 percent, according to the U.S. Department of Agriculture. Of the tomatoes the United States imports, Mexico accounts for 71 percent, with Canada supplying most of the rest.<\/span><\/p>\n

A new tax on food imported from Mexico would leave supermarkets with the difficult choices of raising prices, sacrificing already low profitability, or a mixture of the two.<\/span><\/p>\n

U.S. grocers deal with a higher-than-average cost of goods sold than most other industries, resulting in razor-thin margins. Through 2015, the six-year average cost of goods sold as a percentage of revenue for U.S. grocers was 73.4 percent versus around 56 percent for all U.S. industries, according to Plunkett Research.<\/span><\/p>\n

Shares Kroger and Wal-Mart are down about 3 percent from before Trump’s inauguration a week ago while food distributor Sysco (SYY.N) has lost about 1.5 percent.<\/span><\/p>\n

Source:-\u00a0http:\/\/www.reuters.com\/article\/us-usa-markets-grocers-idUSKBN15B27L<\/span><\/div>\n

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