As Trump’s rates approach

(Bloomberg) – United States President Donald Trump plans to give him in the hands of the Canada and Mexico merchandise rates on Saturday. Now comes the guessing game how they will affect the global bag.

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Distilling the noise nuance of any Trump’s announcement will be a challenge for investors. For example, on Thursday Trump stated that the rates would begin on Saturday, and on Friday Reuters reported that they would really take effect on March 1, and finally, on Friday afternoon, the White House confirmed that in fact they would arrive. February 1.

Beyond this little chaos, there is still a lot of uncertainty. Trump could put 25% of rates for all imports from Canada and Mexico or phase in higher duties monthly. It could give reproach to specific industries such as autos and energy in a directed way that investors interpret as a softening of their harsh warners. And his plan for China and Europe is still a wild card.

“Since we do not know what will happen, we must assume that there is a general increase in rates on almost everything that is imported in the states,” said Chris Beckett, a search chief of kilter Cheviot. “Then, start worrying about tit-pertat retaliation and free-trade general reductions.”

What is interesting is in the ten days since the Trump’s initial tariff threat on January 21, the S&P 500 index is essentially flat, while the capital reference points in Europe, Canada and Mexico are higher and higher The Golden Nasdaq Dragon Index, which is made up of businesses in China, but trade in the United States has jumped more than 4%.

“The market already has a very important price in the subject of U.S. rates, but there is always a risk that Trump will go beyond what is expected,” said Gille Guibout, head of the European Axa Axa Income Im, in a telephone interview. “There is a general feeling of uncertainty that goes beyond the fare problem: Trump is completely unpredictable.”

The following is a look at which world stocks and sectors could be more at risk of Trump’s plans:

Canada and Mexico

With the rates in Canada and Mexico, which were expected to arrive in a day, traders are alert for large swings in sectors that are considered the first lines of any trade war.

Automobiles such as General Motors CO., Ford Motor Co. and Stellalantis NV, which have global supply chains and a massive exhibition in Mexico and Canada, could see great changes. The manufacturers of electric vehicles Tesla Inc., Rivian Automotive Inc. and Lucid Group Inc. They could also feel the pinch. Mentions of the word “rates” are already increasing results calls.

“The rates in Mexico and Canada are actually the worst possible news for the actions of the United States and the economy of the United States,” said Thomas Brenier, head of Lazard Frescion Variable Income. “It is bad news for the US industrial complex and will seriously increase the costs for vehicle manufacturers and disturb the supply chains.”

The pharmaceutical industries of steel, copper and aluminum are also under the microscope, as Trump threatened it. Industrial manufacturers such as Deere & Co., Caterpillar Inc. and Boeing Co. They could fight. In particular, the bomber Aircraft Manufacturer Inc. It is positioned exclusively as a company based in Canada with manufacturing operations in Mexico that sells its products in the United States.

On the other hand, the stocks of small layers are likely to not be affected and, therefore, will benefit competitively, as their operations are normally based nationally, allowing them to avoid the threat of protectionist economic policies.

China and Asia

The President said on Thursday that he would advance with 10% import rights in China, but did not specify time.

Foreign investors have fled almost all regional markets since the United States presidential election in the midst of the more in Trump policies “America First”. Few sectors in Asia have gained positive yields: Sub-Gases for Materials and Public Services have fallen more than 10% each, while those of real estate, consumption staples and energy have fallen more than 5% Each.

China’s income from Chips Asian giants, including Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co., have been under the spotlight, as the hardest rules in the United States to prevent advanced chips from being out of reach of China. The manufacturers of North -American Semiconductors, including Nvidia Corp., Applied Materials Inc. and Broadcom Inc. They could also be successful.

Solar companies also take a significant risk as China controls a significant part of the industry supply chain. Investors will see actions such as the world’s largest manufacturer of solar modules, Longi Green Energy Technology Co. and its supplies of Korea battery of Korea, Korea, like Samsung SDI Co. and LG Chem Ltd. threatened to eliminate a consumer fiscal credit for promoting the adoption of electric vehicles.

Europe

Although the euro region is unlikely to feel immediate pain by Trump’s rates, it is not completely out of the hook, as the United States President has indicated that Europe could face its own set of rates . Members of the Stoxx 600 index generate only 40% of their income in the EU, with 26% from North America.

10% rates on European goods would be shaved by 1% and 2% discount per action, according to the estimates of Citigroup Inc., directed by Beda Manthey. The results are expected to increase by 7% in Europe and 15% in the United States this year, depending on current projections.

Automobile manufacturers would have a significant impact, as companies like Volkswagen AG have manufacturing bases in Mexico. The German vehicle maker is thinking of establishing a production facility in the United States for its Audi and Porsche brands in response to rates, Handelsblatt reported this week. The Stoxx Automobiles & Parts Index has won about 5% this year, with a slightly subperformation of Stoxx 600 after losing more than 12% by 2024, making it the worst artist among the 20 main sectors of the index.

Karen Georges, head of the Ecofi de Paris, said he recently bought shares in a U.S. Waste Management Company that has no exposure to a trade war. It also has German exporters. Although these stocks have an exposure in the United States, they do not have much production there and could benefit as the ease of commercial tensions.

Other European to see industries include miners, especially steel manufacturers, as well as alcoholic beverage manufacturers such as Remy Cointreau SA and Pernod Ricard SA, which are usually sensitive to rates.

Martin Frandsen, head of Principal Management Variable Income Portfolio, recommends that companies make money outside Europe, such as pharmaceutical manufacturers, as well as some insurance companies, defensive features and high capital returns make them attractive. In times of uncertainty. “In an environment of intense uncertainty, it is very selective,” he said.

-With the assistance of Michael Msika.

(The updates index moves to the fifth paragraph, updates the first graph.)

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