While further trade tensions between the US and China would have a negative credit effect on European companies, the impact would be mitigated by the EU's small direct trade exposures, the global footprint of many rated European companies and lower Chinese tariffs on some EU products, Moody's Investors Service said in a report today.

In Europe, the companies most vulnerable to supply chain disruptions are those in the transport equipment, electrical and optical equipment, chemicals and metal product sectors.

The report, "Corporates -- Europe: Trade tensions will modestly disrupt Europe's trade flow with the US and China", is available on www.moodys.com. Moody's subscribers can access the report using the link at the end of this press release. The research is an update to the markets and does not constitute a rating action.

"A continuation of the escalating trade tensions between the US and China will modestly disrupt the trade flows between Europe and its two major trade partners," said Ruosha Li, a Moody's Analyst and the report's co-author. "However, a number of factors will lessen the negative effect of trade disruption on EU companies."