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Investing.com - European stocks mostly fell Monday after U.S. President Donald Trump’s decision to impose hefty tariffs on imports from the European Union, raising the potential of a trade war between the two major trading partners.
At 03:55 ET (07:55 GMT), the DAX index in Germany dropped 0.7% and the CAC 40 in France slipped 0.5%, while the FTSE 100 in the U.K. rose 0.2%, with the U.K. government having already agreed a trade deal with the Trump administration.
Trump announces EU tariffs
Trump announced over the weekend he would be introducing 30% tariffs on imports from the European Union and Mexico, effective from Aug. 1, dealing a blow to the bloc after several months of negotiations to try to reach a trade deal.
This followed news over the past week of similar tariffs on Japan, South Korea, Canada and Brazil, and raised the possibility of a damaging global trade war.
“Imposing 30 percent tariffs on EU exports would disrupt essential transatlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic,” European Commission President Ursula von der Leyen said in a statement.
She said the EU remains “ready to continue working towards an agreement by August 1.”
“At the same time, we will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.”
Together, the EU and U.S. make up almost 30% of all global trade in goods and services and 43% of global GDP. In 2024, trade between the two totaled some 1.7 trillion euros — that’s the equivalent of 4.6 billion euros per day.
German autos slip lower
In the corporate sector, shares of German carmakers fell after the U.S. threat of a 30% tariff on EU imports, with no mention of special treatment for autos.
Shares in Volkswagen (ETR:VOWG_p), BMW (ETR:BMWG), Mercedes-Benz (OTC:MBGAF) and Porsche (ETR:PSHG_p) all fell more than 1%.
Elsewhere, AstraZeneca (NASDAQ:AZN) stock rose after the drugmaker said its drug Baxdrostat met all the main and secondary goals of a late-stage study in patients with uncontrolled or treatment-resistant hypertension.
Crude higher; Russian sanctions ahead?
Oil prices edged higher Monday as traders await news of potential additional U.S. sanctions on Russia that may affect global output.
At 03:55 ET, Brent futures climbed 1.1% to $71.14 a barrel, and U.S. West Texas Intermediate crude futures rose 1.2% to $69.25 a barrel.
Trump is due to make a "major statement" on Russia on Monday, having expressed frustration with Russian President Vladimir Putin due to the lack of progress in ending the war in Ukraine.
A bipartisan U.S. bill that would hit Russia with sanctions gained momentum last week in Congress, but it still awaits support from Trump.
European Union envoys are also seen to be close to agreeing another package of sanctions against Russia that would include a lower price cap on the country’s oil exports.