U.S. supermarket shares dip after Trump threatens Mexico trade

Fri Jan 27, 2017 3:53pm EST
 
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SAN FRANCISCO (Reuters) - 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.

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

Trump on Friday repeated statements that Mexico has taken advantage of the United States and said Mexico "beat us to a pulp," deepening worries about a crisis between the two trading partners.

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.

Kroger shares were down about 3 percent from before Trump's inauguration a week ago while food distributor Sysco (SYY.N: Quote) has lost about 1 percent.

With investors also concerned that Trump could tear up trade deals with China and other countries, Wal-Mart has fallen 4.4 percent since he won the November election.

(Reporting by Noel Randewich; Editing by Leslie Adler)

 
A clown sits inside a bus seen in front of a Wal-Mart store in Mexico City January 11, 2013. REUTERS/Edgard Garrido/File Photo