Gold bars to be exempt from tariffs, White House clarifies
Inbesting.com -- UBS analysts warned that the new U.S. tariff policy could impose a significant economic burden, estimating that the latest measures amount to “an over $700 billion tax on the U.S. consumer assuming tariffs are fully passed through.”
The firm stated that while this represents “less than half of 1%” of U.S. household net worth, it equates to “about 10% of annual retail sales,” making the announcement “very negative for the outlook for demand in its current form.”
The tariffs, which include a baseline 10% duty on all imports and higher rates for certain countries, are expected to have broad economic effects.
UBS estimated that the total impact could result in “demand destruction” amounting to “2% of GDP.”
However, the firm noted that the scale of the potential economic damage could increase the chances of tariff reductions, saying, “it’s possible reciprocal tariffs are dialed back as other countries adjust their own tariffs on U.S. imports.”
UBS pointed out that reciprocal tariffs appear to be “about half what is levied on U.S. imports,” which could create room for negotiation.
The firm suggested that the market sell-off “could be a clearing event as negotiations take place,” but added that “the demand destruction potential between now and then is hard to overstate.”
In terms of industry impact, UBS highlighted the importance of the USMCA exemption, which it sees as critical for cost outlooks in the multi-industry sector.
The firm noted that “CARR benefits the most in this regard relative to investor concerns,” while companies like OTIS and ESAB are well-positioned due to their service-oriented and international revenue structures.
Still, UBS warned, no industrial companies are immune from the broader economic risks created by the new tariffs.