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As markets buckle up for Trump tariffs, these global sectors brace for a rough ride

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Trump's tariffs will bring China 'very close' to a recession: Strategist

U.S. President Donald Trump this weekend announced hefty tariffs on his country’s three biggest trading partners, leaving investors scrambling to position themselves for a global trade war.

Canada and Mexico face 25% duties on their exports to the U.S., with a lower 10% levy imposed on Chinese goods. Canada has already responded with retaliatory tariffs of 25% against $155 billion of U.S. goods.

Trump has, meanwhile, stated that the European Union will be next in the firing line, with the U.K. also under consideration.

Though Trump repeatedly threatened tariffs on the campaign trail, Deutsche Bank analyst Jim Reid said in a Monday note that the market had been “completely under-pricing the risks” and would now be in “severe shock.”

Among the expected short- to medium-term impacts are a slowdown in global economic growth, particularly in countries with large manufacturing sectors, a spike in oil prices, higher prices for U.S. consumers and higher-for-longer U.S. interest rates, with a stronger U.S. dollar as a result.

Trump tariffs could create a new challenge for Chinese policymakers: A growth rate below 5%

Outside of the U.S. and the three other economies directly involved, sectors around the world are braced for impact from the tariffs.

Here are some of the areas expected to be hit:

Automotives

Autos firms — from car brands to the makers of vehicle parts — are expected to be among the worst affected by escalating trade tensions as they represent a major area of international imports into the U.S.

Germany’s Volkswagen, for example, owns Mexico’s biggest car factory where it produces vehicles for export to the U.S. Analysis by RBC Capital Markets estimates the company could see a 9% cut to its earnings as a result of tariffs in a worst-case scenario, while Stellantis — which owns Chrysler and Jeep — also has major operations in Mexico, including the production of Ram pickup trucks, and see a 12% hit to earnings.

The effects on stocks were immediate on Monday, with European automakers on the regional Stoxx 600 index plunging 3.4%, and part suppliers including Valeo and Forvia also tumbling on expectations of a sector slowdown.

Employees work on the assembly line of new energy vehicles at a factory of Chinese EV startup Leapmotor on April 1, 2024 in Jinhua, Zhejiang Province of China.

Auto stocks plunge as Trump tariffs spark trade war concerns

Chip firms

Makers of chips and semiconductor equipment, ranging from Taiwan’s TSMC to the Netherlands’ ASML, are braced for a tariff impact given the industry’s global supply chains — including factories in Mexico and China — and because of a potential slowdown in demand.

Taiwan Semiconductor Manufacturing Co, the world’s largest chipmaker, specializes in making semiconductors for other companies, such as U.S. firms Apple, Nvidia, AMD, Qualcomm and Intel.

ASML, meanwhile, manufactures the extreme ultraviolet lithography (EUV) machines used by many global chipmakers to print intricate designs on chips. ASML ships these tools to multiple countries, including the U.S., Taiwan and South Korea.

The oil and gas market is a 'wild west' right now after Trump tariffs: Pickering Energy Partners

“The latest moves won’t do much to calm the high tensions which have hit the semiconductor sector,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said Monday.

“Companies like Nvidia rely on the production of chips from outsourced factories overseas, like China and Mexico – but many other parts needed to construct AI data centers could also be vulnerable to tariffs, given they are imported.”

Consumer goods

For the U.S. consumer, a host of household and leisure goods made overseas could be set for price increases, from furniture and electrical appliances to clothing, video consoles, phones and toys.

Elsewhere, there will be an impact on U.S.-exported products sent to countries such as Canada which retaliate with tariffs — as well as on consumer goods firms around the world that send products across the U.S.’ borders.

Workers weld acid batteries at the Leoch International Technology Ltd. factory in Saltillo, Coahuila, Mexico, on Monday, Oct. 7, 2024. 

Trump tariffs could raise prices on technology like laptops, smartphones and AI

One example is drinks giant Diageo, which has already been struggling with weakening demand in North America.

Fintan Ryan, consumer equity research analyst at Goodbody, told CNBC that tariffs were one of the biggest challenges for the company this year as the U.S. accounts for roughly 45% of the company’s operating profit.

Around 70% of its sales in the U.S. are imports, meanwhile, including Canadian whiskey, Mexican Tequila, Scotch, and Baileys and Guinness from EU member Ireland. Diageo is due to report earnings on Tuesday.

Chinese e-retailers

Chinese companies face the highest risk from tariffs and other changes to U.S. market access, according to analysis by Morgan Stanley. Of those, hugely popular China-linked online shopping platforms such as Temu, Shein and AliExpress are set to be hard hit.

This is because Trump has halted a trade exemption known as “de minimis,” which had allowed exporters to ship packages worth less than $800 into the U.S. duty-free.

U.S. officials have claimed the exemption allowed Chinese e-commerce companies to undercut their competitors and flagged safety concerns due to their “minimal documentation and inspection.”

The U.S. processed more than 1.3 billion de minimis shipments in 2024, according to data from the U.S. Customs and Border Protection agency.

Without the exemption, high-volume, low-cost products from China’s online retailers will face duties, potentially pushing up the end price of the items and causing a fall in demand.

— CNBC’s Ganesh Rao, Michael Bloom, Annie Palmer and Ryan Browne contributed to this story.

Economics

Trump advisor Hassett confident tariffs will stay despite judges’ ruling

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National Economic Council Director Kevin Hassett speaks to reporters at the White House in Washington, D.C., U.S., April 14, 2025. 

Kevin Lamarque | Reuters

A top economic advisor to President Donald Trump expressed confidence Thursday that court rulings throwing out aggressive tariffs will be overturned on appeal.

Kevin Hassett, director of the National Economic Council, said in an interview that he fully believes the administration’s efforts to use tariffs to ensure fair trade are perfectly legal and will resume soon.

“We’re right that America has been mishandled by other governments,” Hassett said during a Fox Business interview. “This trade negotiation season has been really, really effective for the American people.”

The comments follow a ruling from judges on the Court of International Trade who said Trump exceeded his authority on tariffs, which are aimed both at combating barriers against American goods abroad and stemming the flow of fentanyl across the U.S. border.

While the Centers for Disease Control and Prevention has said that fentanyl is the primary driver in domestic overdose deaths, the judges ruled that related tariffs “fail because they do not deal with the threats set forth in those orders.”

Hassett bristled at the ruling and said the administration will continue its anti-fentanyl efforts.

“These activist judges are trying to slow down something right in the middle of really important negotiations,” he said. “The idea that the fentanyl crisis in America is not an emergency is so appalling to me that I am sure that when we appeal, this decision will be overturned.”

The administration has multiple options to get around the judges’ ruling, including other sections of trade laws it can utilize. However, Hassett said that’s not the plan at the moment.

“The fact is that there are measures that we can take with different numbers that we can start right now. There are different approaches that would take a couple of months to put these in place,” he said. “We’re not planning to pursue those right now, because we’re very very confident that this ruling is incorrect.”

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