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UBS Sees S&P 500 Dropping 5% Should Trump Levy 25% China Tariffs

The firm’s economists expect 10% levy to be anacted this month
Fed, midterm elections seen as pontential offset for risk

Video player cover image — JPMorgan's Lafargue Says U.S. Equities 'Place to Be'

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September 6, 2018, 6:18 PM UTC

With anticipation building for a new round of U.S. tariffs against China, UBS AG warned the resilience in American stocks is under threat.

They may suffer their biggest retreat since April if President Donald Trump imposes tariffs at the high end of an expected range, according to UBS strategist Keith Parker. The S&P 500 could drop 5 percent if the U.S. levies 25 percent tariffs on an extra $200 billion of Chinese goods, a scenario that he said has not been priced into the market. The firm’s economists expect 10 percent tariffs to be enacted by the end of September.