LIVE MARKETS-Taiwan, Europe, Canada most exposed stock markets to U.S. tariffs

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TAIWAN, EUROPE, CANADA MOST EXPOSED STOCK MARKETS TO U.S. TARIFFS

U.S. President Trump's plans to push ahead with tariffs on Mexico and Canada and an extra 10% levy on Chinese imports has again sent mild shockwaves through markets, with investors believing that broader reciprocal tariffs could be forthcoming.

For equity investors, Schroders believes gauging the individual market exposure to the U.S. in revenue terms is important.

Looking at economies with which the U.S. has a trade deficit, Schroders finds that Taiwan's stock market stands "head and shoulders" above other markets, with 43% of revenues derived from the U.S.

"Microchips are the major export in question here, and Taiwan is the only leading-edge chip manufacturer in the world," Schroders senior strategist Andrew Rymer says.

"As a result, you might anticipate that such a strategically important resource could be exempted or given some relief, though that is not guaranteed."

Next on the list is Europe ex-UK, which generates 35% of its revenue in the U.S., followed by Canada at 33% and South Korea at 14%.

While tariffs are yet to take effect, global stocks have generally performed well, led by European and Hong Kong shares, as Rymer believes that announced tariffs so far have been milder than anticipated.

"The potential for market volatility cannot be ignored, however, given risks of further tariffs, tariff rate escalation, and the prospect of retaliatory tariff or non-tariff measures," Rymer adds.

(Samuel Indyk)

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