These 5 parts of the stock market are most at risk if Trump wins the election and implements wide-reaching tariffs, Barclays says

• Trump's proposed tariffs would lower S&P 500 earnings as much as 4.7% next year, Barclays said.
• The presidential candidate has pledged to unleash universal tariffs on all US trade if elected.
• The firm outlined which five sectors are the most exposed to losses if Trump wins and implements tariffs.

Donald Trump's plan to tax virtually all US imports would take a big toll on 2025 earnings, according to Barclays research.

Current outlooks view the election as a coin toss between Trump and Kamala Harris, his Democratic rival. But the outcome has high stakes for trade policy, as the former president has committed to unleashing trade barriers around the US.

"Other countries are going to finally, after 75 years, pay us back for all that we've done for the world. And the tariff will be substantial in some cases," Trump said during the presidential debate on Tuesday.

He previously said that if elected president, all countries could face a 10% universal tariff , while duties on Chinese products would reach as high as 60%. A 100% tariff on cars imported through Mexico could also be in store, Barclays cited him as saying.

If implemented, the bank expects these policies to cut into the S&P 500's earnings.

To be sure, US firms have some way of navigating higher costs associated with tariffs, Barclays said. That includes shifting supply chains or passing prices on to consumers.

But import duties will hit profit margins to a degree, as companies risk losing market share if they don't absorb some of the costs.

"We find that SPX earnings would be negatively impacted by 3.2% if the new Trump tariffs are enacted and another 1.5% if those countries were to retaliate with similar measures," analysts wrote on Thursday.

Companies that rely more heavily on supply chains are especially at risk, with five sectors in most danger: materials, discretionary, industrials, technology, and healthcare, Barclays said.

Discretionary stocks would suffer the largest earnings-per-share impact from import tariffs alone — sector earnings would fall around 10%, Barclays data showed.

Meanwhile, materials is most impacted by retaliatory tariffs on exports. Sector earnings here would drop close to 8%.

Other economists have loudly criticized Trump's tariff idea as fuel for inflation, given that prices will rise amid a pullback in foreign products.

According to Barclays, inflation would climb 0.09 percentage points in the short run, and US GDP could take a 1.2% hit in the first 12 months.

"While the new proposed tariffs would have a modest direct negative impact on corporate earnings if implemented, the second order effects from higher cost inflation and slowing economic growth would be an incremental headwind to corporate earnings, and cause further pain," the bank said.