Goldman Sachs strategists have raised concerns about the potential impact of tariffs on US companies operating overseas as the US election campaign progresses. They have pointed out that stocks with high international revenue exposure could face significant challenges if tariffs are imposed.
Goldman Sachs strategists highlighted that tariffs could create a headwind for companies with high international revenue exposure. This is due to the potential risk of retaliatory tariffs and increased geopolitical tensions. Companies that heavily rely on international suppliers may also struggle with additional challenges if tariffs are implemented.
The strategists noted that prediction markets currently suggest a slightly higher probability of a Trump presidency over a Biden presidency. They emphasized the uncertainty surrounding the size and scope of potential tariff increases but indicated that such increases are likely if Trump wins the election.
The outcome of the US presidential election is expected to have a significant impact on the performance of the US dollar and the relative performance of domestic-facing versus internationally-exposed companies. In a previous instance in 2018 when the US announced tariffs against China under the Trump administration, Goldman Sachs found that companies with domestic sales outperformed those with international sales.
Goldman Sachs’s analysis underscores the potential challenges that American companies with high international exposure could face if tariffs are imposed. The uncertainty surrounding the election outcome and the implications for trade policy add another layer of complexity for businesses operating globally. It is essential for companies to closely monitor developments and strategize accordingly to navigate these challenging times.