On Monday, European markets opened with a slump after U.S. President Donald Trump declared sweeping tariffs on numerous countries, while also threatening to levy import tax on the European Union and the United Kingdom.
Stoxx 600, the pan-European exchange, retreated 1.34% at 8:30 a.m. London time, with all sectors in the red.
During the morning session, shares in the auto sector plunged 3.5%, with shares of French car part supplier Valeo and carmaker Renault plummet 8.3% and 4%, respectively. Meanwhile, German automakers including BMW, Volkswagen and Porsche dropped around 4-6%.
Technology, industrials, and mining indexes in the Stoxx 600 lost around 2%. Germany’s Dax Index also slid by at least 1.7% in morning trade.
The market rout in the region was triggered by Trump’s decision to impose 25% duties on Mexican and Canadian goods, with China receiving a 10% levy. Canada retaliated with its tariffs on U.S. imports, while Mexico has threatened to follow.
Trump told the BBC that both the U.K and the EU were “out of line”, but he said that the deal could be made with the U.K., as the island nations have more trade balance with the U.S., while affirming the tariffs on the EU.
Trump called the U.S. trade deficit with the EU an atrocity, repeating his claim that the bloc has taken advantage of the U.S. Meanwhile, an EU spokesperson said the union will firmly respond to any U.S. tariffs.
Asia-Pacific trading shrunk overnight after the tariff move, while U.S. stock futures eroded on Sunday night as investors raised concerns over tariffs’ impact on the economy and profits.
