Procter & Gamble and Unilever are among big packaged goods companies that would be exposed if U.S. President-elect Donald Trump goes ahead with a threat to impose tariffs on Mexico, data seen exclusively by Reuters shows.

Trump warned days before his win against Democrat nominee Kamala Harris that he would hit Mexico and China with 25% tariffs unless both governments moved to stop the flow of fentanyl into the United States.

While consumer companies have spoken publicly about their investments in Mexico to create a supply chain hub for the United States, the degree to which those supply chains make them exposed to U.S. protectionism has not previously been reported.

About 10% of P&G‘s third-quarter shipments were from Mexico, according to bill of lading figures shared exclusively with Reuters by import data provider ImportYeti. Around 2% of Unilever’s sea imports into the United States come from Mexico, the data shows.

Unilever and P&G declined to comment. The bill of lading data does not include air imports or the truckloads of goods companies bring into the United States via road.

Both companies and other big consumer groups such as Pepsico, producer of fizzy drinks and Lay’s chips, have collectively invested hundreds of millions of dollars in their Mexican supply chains.

That has led some investors since Trump’s win on Wednesday to examine Unilever and its peers’ exposure to Mexico and China, where these companies have manufacturing bases and also derive a chunk of revenue from sales.

Gabriela Siller, director of analysis at Banco Base in Mexico, said exports account for 40% of Mexico’s gross domestic product and 80% of them go to the United States.

Levying the tariffs on staple goods like packaged food and soap could raise prices of Americans’ everyday items if companies are forced to absorb the higher costs.

During Trump’s first term in the White House, the United States imposed deep tariffs on goods from several countries.
The trade war and subsequent Covid-19 pandemic highlighted how reliant global companies are on Chinese manufacturing and supply chains, prompting firms – particularly those that make packaged goods – to turn to “nearshoring”, or producing goods closer to where they’re sold.

Unilever and Pepsico and other consumer company executives have in the past talked publicly about shoring up their Mexico infrastructure to help support global supply chains.

“P&G and other CPG (consumer packaged goods) companies that do import, they may be affected but that really remains to be seen,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.

P&G, the world’s biggest personal goods and homecare company with brands including Gillette, Ariel and Head & Shoulders, said in 2019 it would invest $4 billion in Mexico in the next two years.

The bill of lading data shows P&G ships in far more product from Mexico than Unilever or Pepsico, but has reduced sea imports from that country since 2017.

In the third quarter of this year, P&G imported at least 4.5 million kilograms of product by sea, down from at least 7.9 million kilograms in the third quarter of 2017 early in Trump’s first presidency, according to the data.

Unilever, in the latest quarter, imported by sea over 2 million kilograms of product like Pond’s face cream and Rexona deodorant into the United States, according to the data.

That was up from at least 1.4 million kilograms of product imported in the third quarter of 2017, the data showed.
In contrast, Unilever’s imports from China fell by about 24% from the third quarter of 2017 to at least 296,000 kilograms in July-September this year, according to the figures.

Unilever said last year it would build a manufacturing plant in the northern Mexican border state of Nuevo Leon as part of a $400 million investment in the country over the next three years.