The stock market has been volatile over the past couple of weeks, mostly due to the uncertainty created by the US administration’s imposition of global tariffs. One of the most popular stocks for UK investors is Lloyds Banking Group (LSE:LLOY). So far, the Lloyds share price has jumped both higher and lower, but ultimately remaining virtually unchanged compared to a month ago. Here’s what I think will happen next.

Not too exposed

Let’s start with the most straightforward consideration: Lloyds is a UK-focused bank. Over 95% of its revenue comes from the UK, and it doesn’t have significant operations in the US. So, from that angle, the tariffs won’t impact the business directly.

The other point is that Lloyds predominantly serves corporate clients in the UK that also operate domestically. So again, the risk here of a sharp slowdown in activity is low. Of course, it does have clients that trade out of the UK with the US. But even in this case, the current tariff rate of 10% isn’t crazy, with the UK looking to pursue a trade deal. A trade war with the UK isn’t high on the list of priorities for the US.

From those angles, the Lloyds share price could be a winner when considering the broader FTSE 100. This is because other FTSE 100 peers are international companies, with operations in China and the rest of Asia, as well as the US. In this case, there’s a lot of risk due to the tensions between China and the US. Investors will have noticed this. If they have spare cash to deploy right now, I’d imagine stocks like Lloyds could be a lot more appealing than businesses that trade globally!

A barometer for the UK

Despite the potential for Lloyds stock to rally, there are more indirect concerns to flag. As it’s a domestic bank, the firm is seen as a bellwether for the broader UK economy. If higher tariffs hit the UK, it could dent UK export performance causing business confidence to weaken. This could hurt UK consumer sentiment too.

This matters to the bank because it could see transactional spending dry up and lower demand for loans and mortgages. The share price could fall as investors decide to move away from domestic UK companies and try to diversify with those less exposed to the UK.

Key results ahead

On balance, I think Lloyds could end up being a net winner from the market turmoil. When zooming out, the banking stock is up 31% in the past year. The following quarterly results are scheduled for the beginning of May, and I think this will provide some key commentary on how management see the tariffs impacting operations. Therefore, I’m going to wait until then before making a final decision on whether to buy or not.