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Upcoming US Policies Likely to Burden European Corporates What to Watch • Execution of geopolitical and economic decisions from the new US administration. • Direction of inflation and consumer resilience and spending trends. • Speed of green transition and its impact on investment. • Potential acceleration of M&A and shareholder remuneration. ���������ֳ�’s Sector Outlook: Neutral ���������ֳ� expects broadly stable credit metrics for most corporate sectors in Europe in 2025, leading to our ‘neutral’ outlook. The incoming US administration’s future policies is likely to challenge our neutral stance on underlying developments but these measures could gradually affect European corporates over several years. Our central scenario includes a major shift, although it is too early to assess the full impact of US policies. We anticipate an increase in tariffs, leading to aggravated trade tensions and weaker global consumption and pricing power. This scenario could primarily affect European sectors that export to the US, depend on imports of intermediate parts, and generally affect corporates due to weaker economic growth in the US and Europe. The most exposed sectors include chemicals, metals and mining, consumer goods and retail (especially companies reliant on food segments and restaurants), automakers and their suppliers and hardware technology. Increased tensions will exacerbate the neutral, albeit fragile, macroeconomic conditions we anticipate in the eurozone in 2025. This includes continued stagnation in the region and the German industrial sector, along with more fiscal tightening in France. Nevertheless, several sectors should benefit from an improving consumer outlook and rising real wages and real income.