Carmakers led a decline in European stocks on Thursday after US President Donald Trump threatened to slap 25 per cent tariffs on imports from the European Union.
The broad Stoxx Europe 600 was down 0.6 per cent in early trading while Germany’s blue-chip Dax index, which includes several big exporters, dropped 1 per cent.
Trump made the threat on Wednesday during the first meeting of his cabinet since he took office last month, saying that the EU was “formed to screw the United States”.
“We have made a decision and we’ll be announcing it very soon,” Trump said when questioned about his plans for EU tariffs. “It’ll be 25 per cent generally speaking, and that will be on cars and all other things.”
Germany’s Volkswagen and Mercedes-Benz both fell 2 per cent, while Porsche lost 2.3 per cent. Paris-listed carmaker Stellantis dropped 2.3 per cent.
European stocks have climbed this year in part because the region has so far avoided the worst-case trade war scenario.
“The latest tariffs headlines are a reality check for the autos sector and the broader EU market,” said Emmanuel Cau, an analyst at Barclays.
This is a developing story
