After more than a year of stirring support from skeptical conservatives with an economic agenda of tax cuts and deregulation, Trump announced plans to slap hefty tariffs on steel and aluminum imports last week. The contentious decision prompted a global backlash and heightened fears of a tit-for-tat trade war.
"Although raising tariffs on steel imports will be economically costly, it might be smart politics, since free trade has become particularly unpopular with Republican voters," Barclays' analysts said in a research note.
In acknowledging investors were likely concerned about the broader consequences of Trump's proposals, Barclays said the U.S. president's protectionist rhetoric could be a "useful political strategy."
"Since the benefits of free trade are widely dispersed among many, the beneficiaries are likely to protest only mildly to protectionist measures. Meanwhile, the costs of free trade tend to be acutely borne by a few, with whom protectionism resounds strongly," the analysts said.