Amundi Asset Management: The impact of U.S. tariffs on "Asian factories" is particularly severe; maintaining stock hedges and gold is key
Amundi Asset Management released a report indicating that the U.S. tariff policy has severely impacted "Asian factories," particularly affecting China, South Korea, and Southeast Asian countries, while the Latin American region has relatively benefited. Market volatility is expected to remain high, with profit growth slowing down. The firm recommends maintaining stock hedges and gold investments, believing that the U.S. economy faces recession risks, although inflation may rise in the short term. In terms of U.S. stocks, large-cap stocks are more significantly affected, while small-cap and mid-cap stocks may benefit
According to the Zhitong Finance APP, Amundi published a report stating that U.S. President Trump’s performance on tariff issues has exceeded expectations, taking an important step towards "purifying" the existing trade system. The bank noted that, given Trump's goal of rebalancing the global trade system, tariffs have particularly severely impacted "Asian factories." The Latin America region is relatively winning with a 10% import tax. So far, Mexico has not been subjected to tariff sanctions. Regarding investment prospects, Amundi stated that due to the significant tariff increases not yet being digested by the market, market volatility will remain high in the coming weeks. As costs may rise (increased labor and production costs), profit growth may slow significantly. The bank still believes that maintaining stock hedges and gold is key.
For other countries: Asia faces the highest tariffs, affecting not only China but also South Korea and most Southeast Asian countries, while the impact on Latin America is relatively small. In the long run, the trend of slowing globalization will continue, supply chains will be further restructured, and new regional alliances will emerge.
Amundi stated that they are beginning to see negotiation proposals, such as those from the UK and Singapore, and the bank expects a very smooth flow of news in the coming days.
For the U.S., the bank indicated that although tariffs may push up inflation in the short term, their real impact will be on economic growth, especially as the U.S. economy is already facing significant slowdowns amid rising policy uncertainty. Therefore, the risk of a U.S. economic recession is increasing, but it is still too early to determine a recession at this stage.
The bank pointed out that fiscal policy remains strongly accommodative, and the Federal Reserve is expected to continue cutting interest rates later this year. However, Amundi does anticipate a significant slowdown in the economy this year, with growth rates falling below potential and inflationary pressures rising.
For U.S. stocks, the bank believes that large U.S. stocks will be more significantly affected, while small and mid-cap stocks may benefit. In terms of stock allocation, the bank continues to favor a diversified layout, including selective emerging markets. In terms of duration, the bank remains positive on Europe and holds a near-neutral stance on the U.S.
In terms of currency, as the bank has already anticipated, the U.S. dollar may continue to be under pressure, while the yen will serve more as a safe haven in the event of a sharp deterioration in the economic environment.