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European stocks fell on Thursday, with carmakers among the biggest losers, after US President Donald Trump threatened to hit EU goods with 25 per cent tariffs and said he would bring in levies on other major trading partners.
The broad Stoxx Europe 600 index closed 0.5 per cent down, while Germany’s blue-chip Dax index, which includes big exporters, dropped 1.2 per cent and France’s Cac was down 0.5 per cent.
Trump said on Thursday that he would impose an additional 10 per cent tariff on imports from China. He also said he would press ahead with levies on Mexico and Canada from March 4, having previously halted proposed tariffs on these countries earlier this month, just hours before they were due to begin.
On Wednesday, when asked about EU tariffs, Trump said: “We have made a decision and we’ll be announcing it very soon . . . It’ll be 25 per cent generally speaking, and that will be on cars and all other things.”
Germany’s Volkswagen fell 1.8 per cent, Mercedes-Benz dropped 2.6 per cent and Porsche lost 3.6 per cent. Stellantis closed down 5.2 per cent in Milan.
“The latest tariffs headlines are a reality check for the autos sector and the broader EU market,” said Emmanuel Cau, analyst at Barclays.
Italian luxury-car maker Ferrari was down 7.9 per cent after its largest shareholder, the Agnelli family’s holding company, said it planned to sell a stake worth about €3bn.
European stocks have outpaced the US in the weeks since Trump’s inauguration, as hopes have risen that the region might escape a worst-case scenario trade war.
“Markets have remained resilient because they do not fully believe President Trump,” said Tomasz Wieladek, an economist at asset manager T Rowe Price. “But if [carmakers] are hit with 25 per cent tariffs it will make their exports to one of the world’s largest auto markets significantly less profitable.”
Emanuele Orsini, Confindustria president, an influential confederation of Italian businesses, described Trump’s tariff threat as “an attack on European businesses and European jobs”, adding that “the real objective is the deindustrialisation of our continent”.
AP Møller-Maersk, the world’s second-largest container shipping line, dropped 1.5 per cent.
In the US, the Nasdaq Composite fell 0.9 per cent, with chipmaker Nvidia losing 4 per cent after it reported a surge in fourth-quarter profit and sales but a drop in margins. In Europe ASML dipped 2.6 per cent.
Moderna shares were down 4.2 per cent in New York after Bloomberg reported that US health officials were weighing up pulling funds for the company’s bird flu vaccine.
Following the announcements of Trump’s latest tariff plans on Thursday, the euro fell 0.7 per cent to $1.0411.
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