If the United States and China reach a trade agreement, although the global market will be heartened, more and more people worry that a breakthrough in Sino-US relations will enable US President Trump to turn his finger on German cars or French wine, and the EU may become a victim.
Analysts believe investors should think twice if they are prepared to catch up with the concept stocks of the Golden American-China Trade Agreement, such as the German DAX index, which accounts for a large proportion of export stocks, or the European luxury sector.
Because Saiwengma knows nothing about disaster.
Like many analysts, Alicia Garca-Herrero, Asia-Pacific chief economist and Bruegel researcher at the French Bank for Foreign Trade (Natixis), warned that if China decided to replace a large proportion of imports from Europe with American products in order to cater to the Trump government, the US-China trade agreement "could cost Europe a lot".
It's about huge business opportunities. According to Refinitiv's analysis of corporate data, European listed companies expect total revenue from China to reach 456 billion euros ($521 billion) in 2019, with luxury goods and automotive manufacturing being the most dependent sectors.
Vincent Deluard, global macro strategist at INTL FCStone, said that if China and the United States failed to finalize the agreement, Europe might be flooded with cheap Chinese goods.
"When the trade truce expires on March 1, Europe may lose the most because China will surely sell billions of dollars of discounted goods to Europe," Deluard wrote.
In 2017, China's exports to the European Union and the United States were 374 billion euros and 505 billion dollars, respectively.
Another horrible scenario Deluard describes is that Europe will lose even worse and Trump will win: "Tariffs on European cars and agreements with China may allow the Trump government to claim two victories at the same time."
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