Barclays weighs in on potential tariff risk for Europe if Trump wins

VAT AG

12/09/2024 12:05

** Barclays sees an up to high single-digit percent hit on
European earnings if Donald Trump wins the U.S. presidential
race and in the event of a full-blown trade war
    ** "A Trump win may raise concerns of a full-blown trade
war," the British bank's strategists say in a note
    ** While the direct impact to potential U.S. tariffs on
Europe should be small, the second-order impact through lower
growth and higher inflation could be more severe, they say
    ** "Our economists estimate a -2.0%, -1.4% and -0.7% hit to
GDP for China, the US and the euro area, respectively, in the
event of Trump implementing 10% tariffs globally and 60% tariffs
on Chinese goods" - Barclays
    ** Barclays sees capital goods, autos, beverages, semis and
chemicals as most at risk from potential tariffs due to their
higher exposure to the U.S.
    ** It says its basket of European tariff-exposed stocks has
been tracking the likelihood of a Trump election win, before
recently lagging
    ** Still, it adds some of the tariff risks are partly
reflected already in the stock prices and may be priced out if
Democratic Vice President Kamala Harris continues to gain
momentum in the polls

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Barclays basket of European tariff-exposed stocks    https://tmsnrt.rs/3ziMbrc
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 (Reporting by Anna Pruchnicka)
 ((anna.pruchnicka@tr.com))