Actions of Estee Lauder (HE -3.69%) were among the losers today, even as the broader market rallied in response to former President Trump’s victory.

Estee Lauder has struggled badly in recent quarters amid weakness in China, and today’s selloff appears to come in response to another potential US-China trade war. Trump also continued CHARGESwhich could reduce the profits of a global company like Estee Lauder.

As a result, the cosmetics stock was down 3.9% at 2:33 p.m. ET. That, compared to a 2.5% decline a iShares MSCI China ETFshowing investors moving away from Chinese stocks.

Image source: Getty Images.

Estee Lauder’s problems continue

Estee Lauder shares have fallen sharply since the peak of the pandemic largely due to its challenges in China, and shares continued to lag today as investors turned to cyclical stocks such as financials and energy, which are expected to to do well in the Trump administration. , and away from staples like Estee Lauder.

Tariffs hurt business in the first Trump administration, though CEO Fabrizio Freda tried to allay concerns about the tariffs as early as 2018.

If Trump imposes tariffs this time, China could respond in kind, leading to higher costs for Estee Lauder in two of its key markets.

Can Estee Lauder make a comeback?

The cosmetics giant is down more than 80% from its pandemic-era peak, and the company continues to implement its recovery and growth plan.

Organic sales fell 5% in the fiscal first quarter. It cut its dividend and withdrew its guidance for fiscal 2025, reflecting challenges in China.

It won’t be easy for the company to return to growth without a recovery in China, and a new tariff regime would only make it harder.