Trade Tensions Hit US Consumer Staples Amid Ongoing Tariffs

The recent G20 meeting and ongoing trade tensions have led to increased tariffs on everyday consumer goods. This has put pressure on household spending, affecting some stocks more than others.

Three US consumer staples and discount retailers that are particularly vulnerable to these crosscurrents are Church & Dwight (CHD), PepsiCo (PEP), and Procter & Gamble (PG).

Church & Dwight's cleaning products, oral care items, and basic health essentials are considered essential purchases. However, the company's Touchland brand has struggled to meet expectations, potentially impacting earnings and free cash flow.

PepsiCo's snack and soft drink business is also exposed to trade tensions. The company's chips, cereals, and sodas are repeat purchases that consumers tend to protect even when prices rise due to tariffs or geopolitical shocks.

Procter & Gamble's household and personal care products sit firmly in the category of items households prioritize even when prices increase elsewhere. However, the company operates within a competitive environment and faces pressure from cost increases.