(Bloomberg) — Europe’s investors are bracing for a potential victory for Donald Trump, which last time around drove the sharpest underperformance in regional equities relative to US peers during any of the last eight American administrations.

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The protectionist policies the Republican candidate could unleash on Europe’s export-reliant industries if he defeats the Democrats’ Kamala Harris explain why some expect history to repeat itself in the stock market.

A potential Trump win is starting to get “priced in already” in Europe, said Neil Birrell, chief investment officer at Premier Miton Investors. “People are moving away from the sort of things that did less well during the last Trump” administration, he said.

While S&P 500 companies derive 72% of their sales in the US, members of Europe’s Stoxx 600 make only 40% within their own region. A chunk of the rest comes from the US, by far the European Union’s largest trading partner, with commerce amounting to $952 billion in 2023, according to data compiled by Bloomberg.

Investors are moving out of stocks geared toward Democrat policies. A UBS Group AG basket of European companies seen benefitting from the Inflation Reduction Act (IRA), and others such as renewables stocks and firms that fare best when trade relations are smooth, dropped about 10% last month. That coincides with increased wagers on a Trump win.

This list includes renewable energy companies like Vestas Wind Systems A/S and consumer-facing firms like Pernod Ricard SA and Volkswagen AG.

In contrast, stocks that UBS selected as beneficiaries of a Republican administration are on the up. They include beneficiaries of US reshoring and reflation, a rollback of the IRA, reduced US involvement in EU defense and trade tensions. Defense groups Rheinmetall AG and Thales SA, and tobacco giant Imperial Brands Plc are among these.

Here’s a look at the stocks and sectors most likely to feel the impact of a Trump victory, as well as those most exposed to Harris’s proposed measures:

Tariff Threat

Increasing duties on imports and cutting corporate taxes are the best-known aspects of Trump’s economic policy. He has proposed raising tariffs to 60% for Chinese imports and 20% for the rest of the world, sparking anxiety among European company chiefs. Aside from any direct blow, their firms could be caught in the crossfire if China were to retaliate.

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