According to Deep Tide TechFlow reports, on July 14, Barclays analysts stated that the U.S. threatens to impose a 30% tariff on the EU, which may test the resilience of the U.S. stock market. If the EU retaliates and an economic recession occurs, the stock market could drop by double digits.
Analysts say a full-blown trade war could lead to a repeat of the 'D-Day' crash, with cyclical stocks and financial stocks performing poorly, exacerbated by summer liquidity shortages. Analysts are skeptical about high tariffs, believing that Trump's tolerance for pressure on the stock and bond markets is limited, which may constrain tariff levels on major trading partners.