Constellation Brands stock down 6% as new rates could increase Corona and Modelo import costs

Constellation Brands shares fell more than 8% on Friday because of President Donald Trump's threat to spoil tariffs on all Mexican imports.

The drop put the Mexican beers maker Corona and Modelo on the road to its biggest single day loss since Jan. 9, with a 12.4% drop.

Thursday night, Trump tweeted will impose a 5% duty on all goods from Mexico from June 10 "until illegal migrants arrive in Mexico and enter our country, STOP."

The White House then said in a statement that levies on Mexican imports would increase by 25% if immigration problems persist along the US-Mexico border. The President of Mexico, Andres Manuel Lopez Obrador, responded to the threat with a letter to Trump: "Social problems can not be solved by taxes or coercive measures."

Customs duties on Mexican products would harm Constellation Brands' inventory and net income. According to Morgan Stanley, about 75% of its beer portfolio is "fully imported" from Mexico. The bank also notes that a 5% tariff on Mexican products would reduce the company's bottom line by almost 4%. A 25% levy, on the other hand, would reduce Constellation Brands' profits by 19%.

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