Two stocks that could be hit hard from Trump’s Canada and Mexico tariffs, according to Goldman

President-elect Donald Trump ‘s tariff strategy could hurt two key apparel companies, according to Goldman Sachs. The former president announced late last month that he vows to impose 25% tariffs on all goods from Mexico and Canada, as well as an additional 10% tariff on Chinese goods. With that, Goldman sees Canada Goose and Kontoor Brands being hurt most due to their exposure. “For softlines, if tariffs were to be implemented, we see the largest potential impact to GOOS and KTB, given their significant owned manufacturing in Canada and Mexico, respectively,” analyst Brooke Roach told clients in a Wednesday note. The investment bank said that almost all of Canada Goose’s down-filled products are produced in Canada, estimating that around 80% are sourced in that country. The company has “no direct or indirect” exposure to Mexico, the bank said. Meanwhile, for Kontoor Brands, Goldman found that around 33% of its units were produced in the company’s owned facilities, which are located in Mexico, in fiscal 2023. By contrast, the bank said that the company has no sourcing exposure to Canada. “Given these supply chains for GOOS and KTB are owned rather than outsourced, a significant mitigating offset may be more difficult to achieve, though price increases, dual-sourcing, and other actions could help to offset any cost headwind,” Roach continued. Wall Street is similarly hesitant on Canada Goose, with three of the six analysts covering the name having a hold rating, according to LSEG data. The remaining three analysts have an underperform rating. The stock has notably underperformed in 2024, as shares have fallen nearly 18% year to date. That said, its average price target of $10.81 reflects about 11% upside from Tuesday’s close. However, the majority of the Street is actually bullish on Kontoor Brands. Among the seven analysts covering it, five have a strong buy or buy rating, while one has taken a neutral stance, per LSEG. It has an average target of $93.14, which implies about 1% downside from Tuesday’s close. This year, the stock has almost doubled the year-to-date gains of the broader market, rising more than 50%.