According to Barclays research, Donald Trump's plan to impose tariffs on almost all imported products in the United States will have a significant impact on corporate earnings in 2025.
The current belief is that the election will be a battle between Donald Trump and his opponent, Kamala Harris. But the election result is crucial for trade policy, as the former president has promised to set up trade barriers across the United States.
In Tuesday's presidential debate, Trump said, '75 years later, other countries will eventually repay us for everything we've done for the world. In some cases, tariffs will be quite high.'
He has previously stated that if elected president, all countries could face a universal tariff of 10%. Barclays cited him as saying that cars imported from Mexico could also be subject to a 100% tariff.
The bank expects that once these policies are implemented, they will reduce the earnings of constituents of the S&P 500 index.
Barclays states that it is certain that U.S. companies have ways to cope with the cost increase caused by tariffs. This includes shifting supply chains or passing on the price increase to consumers.
However, import tariffs will to some extent affect profit margins because if companies do not absorb some of the costs, they may lose market share.
On Thursday, analysts wrote, 'We find that if Trump implements new tariffs, SPX earnings will be impacted negatively by 3.2%, and if these countries take similar retaliatory measures, SPX earnings will be further negatively impacted by 1.5%.'
Barclays indicates that companies heavily reliant on the supply chain, especially in the most dangerous five industries: Materials, Non-essentials, Industrial, Technology, and Medical Care.
Barclays data shows that the earnings per share of non-essential consumer stocks will suffer the greatest impact from import tariffs - the earnings per share of such stocks will decrease by about 10%.
Meanwhile, the materials industry is most affected by retaliatory export tariffs. The industry's profits will decline by nearly 8%.
Other economists strongly criticize Trump's tariff ideas, believing that this will exacerbate inflation, as the decline in foreign product availability will lead to price increases.
Barclays Bank expects a 0.09 percentage point increase in the short-term inflation rate, with a potential 1.2% impact on the US GDP in the next 12 months.
The bank states: 'While the implementation of new tariff proposals will have a slight direct negative impact on corporate profits, the second-order effects of rising cost inflation and slowing economic growth will increasingly hinder corporate profits, causing further distress.'