Who’s losing from Trump’s win?

The Republican candidate's victory may have boosted the US stock market, and even BTCUSD soared above the $88,000 mark, but it has also left many companies concerned about what could come next.  

German automakers like BMW, Mercedes-Benz, and Volkswagen — who export large numbers of cars to the U.S. — saw their stocks fall by 8.1%, 6.9%, and 5.0%, respectively, last week.   

This drop came in response to Trump’s campaign promises to impose high tariffs on imported cars, a move that would put even more pressure on already struggling companies.  

For example, Volkswagen is considering closing three factories in Germany due to tough competition from China and weak demand in Europe, while other automakers are planning major layoffs.  

Investors are also hesitant to invest in these stocks despite attractive forward multiples such as EV/EBITDA, P/E, solid dividend yield, and little or no debt. The lack of confidence is holding the money back.  

For things to turn around, these companies must address the challenges of high energy prices and fierce competition from Chinese manufacturers — and that will not be easy.  

This is only part of the problem, as other industries could also be affected, which could affect the overall economic situation in several countries, and certainly not in a positive way.  

Additionally, according to Politico, Trump's tariff plan could lead to a 10% drop in the EURUSD rate and reduce revenues for major European companies by over 5% next year.   

In China, UBS estimates that adding a 60% tariff on top of existing tariffs would lower China’s GDP growth by 2.5 percentage points over the next 12 months. The list of “victims” doesn't end here.   

How will countries deal with the consequences?  

Europe has two options: to fight back or to negotiate, for example, by offering to increase certain U.S. imports in exchange for tariff exemptions. It remains to be seen which way they go.  

However, the challenge is that the EU is not in the best position to enter a trade war. Its economy is still reeling from high energy prices, large budget deficits, and other problems.  

China, for its part, could introduce more stimulus, increase manufacturing, and let the yuan weaken, limiting the effect on growth to less than 1% per year during Trump's four-year term.  

However, the country could be accused of a currency war, which could intensify tensions. Investors seem wary of the risks and are beginning to withdraw cash from Chinese stocks, causing the HSI index to fall.  

Unless Trump softens his protectionist stance, the next four years could bring significant challenges for governments, businesses, households, and ultimately the stock market.