Tensions are ratchetting up between U.S. and its major trading partners. In the latest, Bloomberg on Wednesday reported that the Biden administration is considering a wide-sweeping rule to clamp down on companies exporting their critical chipmaking equipment to China. That follows new tariff rates on $18 billion worth of Chinese imports — including electric vehicles, solar products and steel as well as aluminum — that the Biden administration announced in May. And in an interview published Tuesday, former president Donald Trump said Taiwan should pay the U.S. for defense , claiming also that Taiwan took “about 100%” of America’s semiconductor business. Trump also pledged that, if elected, he will impose a 10% tariff on all U.S. imported goods, and more than 60% tariffs on Chinese imports. Markets are betting on increasing odds of a Trump presidency after the attempted assassination on the former president last weekend, raising the question of what this means for investors. U.S.-China risks JPMorgan says China’s utilities sector could be “the winner” if U.S.-China tensions escalate. It noted that during the three periods of U.S.-China trade tensions between 2018 and 2020, where there was escalation, a standoff and a re-escalation, the MXCN Utilities index did better than the broader MXCN index — with an average outperformance of 12.8%. JPMorgan’s top picks in this area in this area include: Hong Kong and China Gas , Power Assets and Huaneng Power . They are all Hong Kong-listed. The bank also noted that the Republicans have pledged to “bring critical Supply Chains back to the U.S., ensuring National Security and Economic Stability” and “strengthen Buy American and Hire American Policies.” That could be negative for Chinese tech exporters, it said in its July 17 report. Europe’s ‘prime concern’ Europe’s gross domestic product, as well as the earnings of its companies, could be hit by tariffs, said Goldman Sachs in a July 17 report. “Prediction markets are now assigning a high probability of a Trump re-election n(c.70%). For Europe, the prime concern is tariffs,” wrote Goldman analysts. Goldman’s economists estimate Trump’s 10% tariff, if it comes to pass, would take out one percentage point from the euro area’s gross domestic product. Each one percentage point drop in sales-weighted GDP would cause a 10% decrease in European stocks’ earnings-per-share, said Goldman. Overall, the total hit to Europe’s earnings-per-share would be about six to seven percentage points, the bank said. “If the entire impact came in 2025 this would be enough to eliminate any growth that year (our current top-down forecast is 4%),” Goldman wrote. The bank also looked to history as a guide, saying that emerging markets were the worst performers in response to tariffs imposed in 2018 and 2019. China was hit the most, followed by Europe and then then the United States. Within Europe, Germany was more affected than France, said Goldman. Within sectors, beneficiaries of rising trade risks tend to be defensive stocks such as utilities, health care as well as Europe’s GRANOLAS stocks, according to the bank. Goldman coined the term GRANOLAS, which refers to the continent’s largest market-cap companies: GSK , Roche , ASML , Nestle , Novartis , Novo Nordisk , L’Oreal , LVMH , AstraZeneca , SAP and Sanofi . Cyclical stocks — autos, industrials and financials — tend to be negatively correlated to trade uncertainty, said Goldman. Overall, if Trump gets reelected, Goldman is bullish on its basket of stocks that comprises European companies with U.S.-based businesses rather than exporters. It noted that in recent years, a large portion of Europe’s manufacturing production has been shifted to the U.S. Constituents of that basket include: Air Liquide , British American Tobacco , Dassault Systemes , GSK , Novo Nordisk , Roche , Stellantis , Intercontinental Hotels and more. Mega tech stocks Global chip stocks fell sharply on Wednesday, with ASML , Nvidia and TSMC posting declines after those reports of potentially tighter trade restrictions from the U.S. Those declines have implications for mega tech earnings, according to Louis Navellier, chairman and founder of Navellier & Associates. “Today’s tech correction seems to suggest that the growth rate of Mega Tech earnings, which have a very big influence on overall market earnings, are expected to slow,” he wrote in a Wednesday note. But he says a “meaningful selloff” in mega tech will see other names “pushed down as collateral damage.” “These will be buying opportunities. And if the AI narrative plays out as expected, a material sell-off in Mega Tech will present a buying opportunity in those names as well,” he wrote. — CNBC’s Michael Bloom contributed to this report.