President-elect Donald Trump's proposed tariffs could have unintended consequences for certain brands – negative sentiment from Chinese consumers that could hurt U.S. companies' sales in that country, Bernstein found.
"The tail risk of China demand backlash is less likely and harder to predict but could be devastating for China-exposed brands," analyst Aneesha Sherman wrote in a Tuesday note.
Although Trump's proposed tariffs represent a U.S. policy shift, all Western brands will likely experience a downturn in sentiment, "as Chinese consumers will bucket them together as foreign brands rather than discern between US vs. Canada (e.g.
A similar fallout also occurred among Chinese consumers during 2021 after the Better Cotton Initiative suspended its operations in China's Xinjiang region.
Chinese consumers then boycotted not only U.S. brands such as Nike, but also European names such as H & M, Adidas and Burberry, the analyst noted.
Persons:
Donald Trump's, Bernstein, Aneesha Sherman, Trump, Trump's, LULU, Sherman, — CNBC's Michael Bloom
Organizations:
Nike, Capri Holdings, . Canada, Adidas, Cotton Initiative, Burberry
Locations:
China, Canada, Mexico, U.S, China's Xinjiang