In case you have not yet heard, China and the U.S. are going back and forth constantly threatening to impose increasing tariffs on imported goods; primarily things like natural gas, aluminum, steel, etc. But since word of this has hit the press, which stocks have investors and analysts decide to steer clear from in fear that shares would drop once the imposed tariffs go into play?
Besides agricultural fields taking a huge hit due to circumstance and tech stocks still highly fluctuating in this undetermined market, it’s actually the luxury clothing and accessory businesses that investors are worried about. European brands like Gucci and Louis Vuitton could fall despite their current strong numbers, as sales of their products are expected to decline in both the U.S. and China.
Currently, investors are speculating that there will be a “trickle down effect” that occurs when the tariffs take full effect. Essentially, the companies getting hit even harder, such as carmakers and industrial companies who rely on importing the materials directly affected by the tariffs, will cause consumers to spend less money on luxury items, specifically these European ones talked about here. While parent company to Louis and Gucci, Kering, is an investor favorite with near record-high shares, the climate of the economy under the impending trade war could affect these shares in any unpredictable way.
