The prospect of Donald Trump imposing a raft of new tariffs if he wins next month’s US presidential election has hit the shares of export-sensitive European companies such as carmakers and luxury goods groups.

A basket of 28 European stocks exposed to US tariffs compiled by Barclays has tumbled 7 per cent since late September as the former president’s odds of an election victory shorten. The basket, which includes Diageo, LVMH and Volkswagen, is now down 2 per cent so far this year, compared with an 8 per cent rise for the broader European stock market.

The declines show how Trump’s promise to launch a trade war if he wins a second term in the White House is piling further pressure on industries already struggling with lacklustre domestic economies and a slowdown in demand from their key markets in China.