“It's too early to sell in sectors threatened by tariffs”

Alberto Matellán, General Manager at La Financière Responsable, believes that although in principle the new White House policy could harm European exporter, it is still “difficult” to tell what their impact will be as the specifics are yet to be defined, meaning “it’s too early to start selling in these sectors,” including the automotive or steel industries.

As part of his presentation on Wednesday at Radio Interdo to analyze economic developments, Matellán warned, however, that the major problem posed by tariffs may be their impact on inflation. “Trump's policy is tremendously inflationary,” not only in the United States, but also worldwide, leading him to believe that price increases are “a very high risk” in the short term. In addition, central banks “could start to take this risk into account,” having a knock-on effect on monetary policy.

This week, a large part of current affairs is focused on the start of talks on Ukraine between the United States and Russia, an initiative from which Europe has been excluded. Despite this, the MAPFRE economist believes that a possible peace would be “a very positive element” for the European economy, beyond the role it plays at the negotiating table.

Optimism in European equities, major challenges in Germany

European stock markets are in a good moment, with Matellán believing this could continue on account of different factors. In 2024, Europe performed worse than the USA, for example, meaning it still has a long way to go. Most importantly, the macro data that we are seeing about the European economy are exceeding expectations, which, in addition to peace in Ukraine, would make for a “better than expected” scenario. The greatest risk that this trend faces are, once again, changes in price: “I'm optimistic but inflation really take its toll on us,” emphasized Matellán.

Furthermore, Europe is focused on the German elections, with the emerging government expected to “have a big job on their hands,” according to Matellán, for political and economic reasons. Europe’s biggest power must “completely reorient its economy,” as competitors have emerged in its main strength, heavy industry, in which it has been heavily weighed down by the increase in energy, within a highly dependent energy model. Germany would have to make “long-term decisions that involve all agents,” which is particularly complex given the particularly divided political scenario.

Asked about the potential of companies involved in the defense sector, against a backdrop of greater investment in military spending, the economist believes that “there are reasons to assume they will experience a renaissance.”