Tariffs remain a big risk for the DAX

Although equities in the euro-zone have fallen sharply in the past week as the US-China trade dispute has flared up again, they are still much higher than they were at the start of the year. This suggests that a lot of good news about trade is still discounted in the markets and could therefore be unwound if US-China talks break down and the US extends duties to all Chinese imports. Germany’s DAX would be particularly vulnerable, especially if the US also imposed tariffs on imports of autos more generally.