This report does not constitute a rating action. Impact from tariffs on goods from Mexico and Canada remains, but we now believe it will be less than our previous expectations because of exemptions under the U.S.-Mexico-Canada Agreement. While the 25% effective tariff rate is lower than the additional 145% on imports from China and proposed rates in certain other regions, even if the U.S. administration lowers rates and they remain above 50%, we believe this could impair issuers that we surveil in the consumer products and retail industries. Of the issuers we rate, we initially conclude that 10%-15% of consumer products companies and 5%-10% of retail companies could face review for negative rating actions. Our view of a weakening consumer
