(Bloomberg) – US President Donald Trump plans to slap on Saturday Tariffs on goods from Canada and Mexico. Now there is a guessing game that it will affect the global stock market.
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The distillation of the noise of the noise of any Trump announcement will be a challenge for investors. For example, Trump stated on Thursday that Tariffs would start on Saturday, and then on Friday, Reuters reported that he would actually take effect on March 1, and finally on Friday afternoon, the White House confirmed that he would actually hit on February 1st.
Behind that little chaos, there is still a lot of uncertainty. Trump could put 25% of tariffs on all imports from Canada and Mexico or phase in higher duties on a monthly basis. He could give re -industries like a car and energy in a target way investors interpret as softening his sharp warnings. And his plan for China and Europe remains a savage ticket.
“Since we do not know what will happen, we must assume that the general increase in tariff is to almost everything that is imported to the states,” said Chris Beckett, chief of research at Quilter Cheviot. “Then you start to take care of the retaliation and the general reduction of free trade.”
What is interesting in 10 days from Trump’s initial threat to tariff on January 21, the S&P 500 index is flat, while the reference values of the share in Europe, Canada and Mexico are increasing, and Nasdaq Golden Dragon Index, which consists of companies What are the companies that are companies that consist of business in China, but shops in the United States have jumped more than 4%.
“The market has already been quite appreciated by US tariffs, but there is always the risk of Trump to cross what was expected,” said Gilles Guibout, head of European shares in AXA im, said in a telephone conversation. “There is a general sense of uncertainty that goes beyond the tariff questions: Trump is completely unpredictable.”
Here’s a look that the global part of the stock and the sector could be in most danger of Trump’s plans:
Canada and Mexico
With tariffs in Canada and Mexico, which is expected to hit one day, traders are on standby for large swings in sectors considered the first lines of any trade war.
Car manufacturers such as General Motors Co., Ford Motor Co. and Stellantis NV, which have global supply chains and mass presentation to Mexico and Canada, could see significant changes. Producers of Tesla Inc., Rivian Automotive Inc. and Lucid Group Inc. They could also feel a pinch. Mention the words “tariffs” are already increasing to the calls of earnings.
“Tariffs to Mexico and Canada are actually the worst possible news for US shares and US economy,” said Thomas Brenier, head of the Lazard Freres Gustion shares. “It is bad news for the US industrial complex and will seriously increase the costs of car manufacturers and disrupt the supply chains.”
Pharmaceutical, steel, copper and aluminum industry are also under a microscope, as Trump threatened the tariffs on them. Industrial manufacturers like Deere & Co., Caterpillar Inc. and Boeing Co. They could fight. In particular, Bombardier Inc. It is uniquely positioned as a Canadian company with production operations in Mexico, which sells its products in the US.
On the other hand, small drop supplies are unlikely to influence and therefore have a competitive benefit, because their surgery is usually based on Earth, allowing them to avoid threat of protectionist economic policies.
China and Asia
The President said on Thursday that he would move forward with 10% of import duties at China but did not designate timing.
Foreign investors have escaped with almost all regional markets than US presidential elections, due to the increasing focus on Trump’s “First” policy. Several sectors in Asia have brought positive yields-pod-gauge for materials and utility services have fallen more than 10%, while those real estate, consumer staples and energy fell more than 5%.
Chinese revenues of Asian chip -Divov, including Samsung Electronics Co. and Taiwanese Semiconductor Manufacturing Co. American semiconductor manufacturers, including Nvidia Corp., Applied Materials Inc. and Broadcom Inc. They could also hit.
Solar companies also face a significant risk because China controls a large part of the supply chain of that industry. Investors will watch stocks like the world’s largest solar producer, Longi Green Energy Technology Co. and his smaller peers I Solar Technology Co. Korean batteries suppliers, such as Samsung SDI CO. and lg chem ltd. She threatened to remove the consumers’ tax loan aimed at strengthening electric vehicles.
Europe
Although the euro region is unlikely to feel immediate pain from Trump’s levies, this is not completely excluded, as the US president indicated that Europe could face its own tariff. The Stoxx 600 Index Members generate only 40% of their revenues within the EU, and 26% come from North America.
Tariffs of 10% on European goods would be shaved between 1% and 2% of the earnings per share, according to the assessment of the strategist Citigroup Inc. led by Beata Manthey. Earnings are expected to increase 7% in Europe and 15% in the US this year, based on current projections.
Car manufacturers would probably see a significant impact because companies like Volkswagen AG have production base in Mexico. The German car manufacturer is considering placing a manufacturing facility in the US for his Audi and Porsche brands in response to Tariff, Handelsblatt reported this week. The Stoxx car and parts index has acquired about 5%this year, which is slightly weaker than the Stoxx 600 after losing more than 12%in 2024, making it the worst contractor among the 20 main index sectors.
Karen Georges, Ecofo Funds Manager, said she recently purchased shares at an American waste management company that has no exposure to a trade war. She also holds German exporters. Although these shares have exposure to the US, they do not have much production there and they can benefit because trade tension is lightness, she said.
Other European industries that look at miners, especially steel producers, as well as alcoholic beverages manufacturers such as Remy Cointreau with and Pernod Ricard with, who are sensitive to news of tariffs.
Martin Fradsen, a portfolio manager of Global shares in the main property management, recommends companies earning outside Europe, such as pharmaceutical manufacturers, as well as certain insurance companies whose defense characteristics and high capital yields make them attractive at the time of uncertainty. “In an environment of increased uncertainty, it pays to be very selective,” he said.
-With the help of Michael Msike.
(The index is updated in the fifth paragraph, updates the first chart.)
