Goldman: Trump's victory may "wipe out" European companies' profit growth next year

If Donald Trump is re-elected as US president, he could "wipe" European companies' earnings growth next year, according to a Goldman Sachs analyst on Wednesday, as the former president has promised to impose tariffs on imports. The bank said the policy could drag European GDP down by 1 per cent, and that a 1 per cent drop in European "sales-weighted" GDP would wipe out about 10 per cent of European companies' earnings. The damage could be partially offset by factors such as a stronger dollar and weaker European currencies. The broker expects the impact on European companies' earnings per share to be 6-7 per cent, taking into account offsetting factors.

Sharon Bell, a strategist, said: "We expect European companies' earnings per share to grow 4 per cent in 2025, so this impact would be enough to 'wipe' next year's growth." Goldman Sachs added that European utilities and healthcare are often the main beneficiaries of rising trade risks, while auto, industrial and financial sectors could be affected. Ms Bell estimates that Mr Trump's tariff policy could also drag US GDP down by 0.5 per cent.