Shares of Estee Lauder (NYSE: EL) were among the losers today even as the broad market soared in response to former President Trump's victory.

Estee Lauder has struggled badly in recent quarters amid weakness in China, and today's sell-off seems to come in response to another potential trade war between the U.S. and China. Trump also campaigned on tariffs, which could cut into profits for a global company like Estee Lauder.

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As a result, the cosmetics stock was down 3.9% as of 2:33 p.m. ET. That compared to a 2.5% decline in iShares MSCI China ETF, showing investors turning away from China stocks.

Estee Lauder's problems continue

Estee Lauder stock is down sharply from its pandemic peak in large part due to its challenges in China, and the stock continued to get left behind today as investors shifted toward cyclical stocks like financials and energy, which are expected to do well in a Trump administration, and away from consumer staples like Estee Lauder.

Tariffs did weigh on the business in the first Trump administration, though CEO Fabrizio Freda attempted to tamp down concerns about tariffs back in 2018.

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

Can Estee Lauder bounce back?

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 its fiscal first quarter. It slashed its dividend, and it pulled its fiscal 2025 guidance, 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 that more difficult.

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