A second China shock is hitting Europe. These stocks are most vulnerable, strategist says.

A Panmure Liberum note warns that China’s redirection of exports from the U.S. to the U.K. and Europe is exerting renewed pressure on European companies, eroding margins and intensifying competition. China cut its U.S. share from 12.5% (2024) to 8.1% (2025) while boosting exports to the EU and U.K., enabled by sharp price cuts. High‑tech and industrial inputs are seeing rising volumes but collapsing values, prompting the strategist to flag sectors such as computers/electrical equipment, chemicals, machinery and textiles as particularly vulnerable. The EU is expected to respond with narrowly targeted tariffs, but pain for margin‑sensitive European producers could weigh on the Europe 50 and related regional stocks in the near term.