(Bloomberg) – US President Donald Trump plans to slap the definitions of goods from Canada and Mexico on Saturday. Now the guessing game comes on how it affects the global stock market.
Most of them read from Bloomberg
Distributing the nuances of the noise of any advertisement from Trump will be a challenge to investors. For example, Trump indicated on Thursday that the customs tariff will start on Saturday, then Reuters reported on Friday that it would actually enter on March 1, and finally on Friday afternoon the White House confirmed that they would actually collide on February 1.
Besides a little chaos, there is still a lot of uncertainty. Trump can put a 25 % tariff on all imports from Canada and Mexico or stage in higher duties on a monthly basis. It can give a reformulation of specific industries such as cars and energy in a targeted manner that investors explain as softening its harsh warnings. His plan for China and Europe remains a wild card.
“Because we do not know what will happen, we have to assume that there is a general increase in definitions of everything that is imported to the states,” said Chris Picky, Coillere Cheviot, head of research. “Then you begin to worry about revenge for revenge and general discounts in free trade.”
What raises attention in the ten days since Trump’s first introductory threat on January 21, the S& P 500 index is mainly flat while stock standards in Europe, Canada and Mexico are all higher, and the Nasdaq Golden Dragon Index, which consists of companies carrying out business in China but trade in The United States jumped over 4 %.
“The market has already been a lot of pricing a lot on the issue of American definitions, but there is always a risk that Trump will exceed what is expected,” said Gwybut’s generation, European -head of Axa IM, in an interview. “There is a general feeling of uncertainty that exceeds the tariff issue: Trump is completely unpredictable.”
Below is a view that the shares and global sectors may be more at risk than Trump’s plans:
Canada and Mexico
With the expectations of Canada and Mexico to reach one day, merchants are alert for great swing in the sectors that are the front lines of any commercial war.
Car manufacturers such as General Motors, Ford Motor and Stellantis NV can see, which have global supply chains and huge exposure to Mexico and Canada, great fluctuations. Tesla Inc. electric car manufacturers can feel. And Rivian Automotive Inc. And Lucid Group Inc. With tank. It mentions the word “tariff” that already rises on profit calls.
“The definitions of Mexico and Canada are actually the worst possible news of American shares and the American economy,” said Thomas Brienner, head of the stocks at Lazard Fis Gest. “It is bad news for the American Industrial Complex and will raise the costs of car manufacturers and disrupt supply chains.”
The pharmaceutical, steel, copper and aluminum industries are under a microscope, as well as because Trump threatened definitions on them. Industrial manufacturers such as Deare & Co. can And Caterpillar Inc. And Boeing Co. struggle. In particular, Bombardier Inc. The aircraft manufacturing company, as a Canada -based company with manufacturing operations in Mexico that sells its products in the United States.
On the other hand, small stocks are likely to be affected, and thus will benefit competitively, as their operations are usually on a local basis, allowing them to avoid threatening protective economic policies.
China and Asia
On Thursday, the president indicated that he would advance with 10 % import duties on China, but he did not specify the timing.
Foreign investors have escaped almost all regional markets since the US presidential elections, amid the increasing focus on Trump’s “first” policies. A few sectors in Asia have achieved positive returns-the sub-chimneys of materials and facilities have decreased more than 10 % each, while those real estate, consumer foodstuffs and energy fell more than 5 % each.
China’s revenues from Asian chips giants, including Samsung Electronics Co. And Taiwan Semiductor Manufacturing Co. Classes of American conductors, including NVIDIA Corp. And Applied Mateials Inc. And Broadcom Inc. To take great success.
Solar companies also face a great danger because China controls a large part of the supply chain in that industry. Investors will see shares like the largest solar unit maker in the world, the Longi Green Energy Technology, and the Korean battery suppliers in Samsung SDI and LG Chem Ltd. He threatened to eliminate consumer tax credit aimed at enhancing the adoption of the electric car.
Europe
Although the euro area is unlikely to feel immediate pain from Five Trump, it is not completely out of the hook, as the US president indicated that Europe may face its set of tariffs. The Stoxx 600 members generate only 40 % of their revenues within the European Union, with 26 % of North America.
The 10 % customs tariffs will fly on European goods between 1 % and 2 % of the stock profits, according to estimates issued by Citigroup Inc. strategies. Under the leadership of Beata Manthey. The profits are expected to increase by 7 % in Europe and 15 % in the United States this year, based on the current expectations.
Auto industry companies are likely to see a major impact, as companies like Volkswagen AG have manufacturing rules in Mexico. The German auto maker is considering creating a production facility in the United States for its Audi and Porsche brands in response to the definitions. The Stoxx Automobiles & Parts has gained about 5 % this year, which led to twice the performance of Stoxx 600 after losing more than 12 % in 2024, making it the worst performance among the 20 main sectors of the index.
Karen George, director of funds at ECOFI in Paris, said that she recently bought shares in the American waste management company that is not exposed to a trade war. She also holds German exporters. She said that these shares have some exposure to the United States, but they do not have much production and can benefit from the ease of trade tensions.
Other European industries that must be seen from miners, especially steel makers, as well as alcoholic makers such as Remy Cointreau SA and Pernod Ricard SA, which tend to be sensitive to news on definitions.
Martin Frandsen, the global stock portfolio manager in the management of the main assets, recommends companies that make money outside Europe, such as drug makers, as well as some insurance companies that make their defensive properties and high capital returns attractive during times of uncertainty. “In an environment of increased uncertainty, it is useful to be very selective,” he said.
-With the help of Michael Mika.
(Movements of the update index in the fifth paragraph, first planning updates.)
