European equities plunged on Monday following a renewed threat from U.S. President Donald Trump to impose new tariffs on several European nations. The DAX, CAC40, and EUROSTOXX50 all declined sharply, with automakers and luxury brands leading the sell-off.
- EUROSTOXX50 down 2.4%, DAX down 2.8%, CAC40 down 2.6% on Monday
- BMW.DE dropped 5.3% amid tariff fears
- LVMH.PA fell 4.1% on concerns over U.S. export barriers
- Automotive and luxury sectors led the broader market decline
- Tariff threat has triggered immediate risk repricing despite no formal policy change
- Markets now focused on potential retaliatory measures and EU coordination
European stock indices suffered steep losses Monday as investor sentiment deteriorated over President Donald Trump’s latest warning of sweeping new tariffs on European exports. The EUROSTOXX50 dropped 2.4%, the DAX fell 2.8%, and the CAC40 slid 2.6%, reflecting heightened concerns about escalating trade tensions between the U.S. and key European trading partners. The automotive sector bore the brunt of the selloff, with BMW.DE shedding 5.3% amid fears that increased U.S. tariffs could disrupt export volumes and margins. Other major automakers across the region also posted losses, as investors recalibrated exposure to transatlantic trade risks. Luxury goods maker LVMH.PA declined 4.1%, pressured by anticipations of retaliatory measures that could affect high-end consumer goods exports to the U.S. The market reaction underscores the sensitivity of European equities to U.S. trade policy shifts, particularly given the region’s heavy reliance on export-driven industries. The threat, while not yet implemented, has triggered immediate repricing of risk, especially for cyclical and import-dependent sectors. Investors are now assessing the likelihood of policy escalation, with attention focused on upcoming U.S. trade announcements and potential coordination among European governments to counterbalance potential disruptions.