European markets turned lower Monday after Trump threatened 25% tariffs on EU cars and trucks, adding pressure to automakers and broader risk sentiment.
European stocks moved lower Monday as investors weighed President Donald Trump’s threat to raise tariffs on European Union cars and trucks to 25%, while fresh tensions around Middle East shipping routes kept pressure on global markets.
The pan-European Stoxx 600 was down 0.4% by 1:45 p.m. in London, reversing gains from earlier in the session. Major indexes in Frankfurt, Paris and Milan were in negative territory, while regional stocks were broadly weaker. London’s FTSE 100 was closed for the U.K. early spring bank holiday.
The pullback underscored how quickly trade and geopolitical risks can reprice European assets. Investors were assessing the possibility of a new transatlantic tariff clash just as oil markets responded to security concerns around the Strait of Hormuz, a critical route for global energy shipments.
Automakers were among the clearest weak spots. European auto stocks fell about 1% after Trump said Friday that he would increase tariffs on EU cars and trucks to 25%. The White House said the changes would be made under Section 232, the trade authority the administration has used for vehicle and auto-parts tariffs on national security grounds.
Auto parts maker Continental dropped 4.2%, the steepest fall on the Stoxx 600. Mercedes-Benz lost 2.4%, and Volkswagen traded 1.5% lower. Nokia was a standout gainer, rising 7.7% after Inseego said Thursday it would acquire Nokia’s fixed wireless access business.
The tariff threat follows a February Supreme Court ruling that struck down large parts of Trump’s tariff agenda. The court rejected the administration’s use of the International Emergency Economic Powers Act for some import duties, saying the law did not authorize the president to impose those tariffs. The White House said Friday that the EU had failed to make substantial progress on commitments under a trade agreement.
The European Commission said it remained in contact with U.S. counterparts and was seeking clarity on Washington’s commitments. “Should the US take measures inconsistent with the Joint Statement, we will keep our options open to protect EU interests,” a commission spokesperson said.
Markets were also watching the Middle East after Trump unveiled a plan called “Project Freedom” to help ships move through the Strait of Hormuz. The plan could involve troops, guided missile destroyers and aircraft escorting commercial vessels through the waterway, according to the source material.
The United Kingdom Maritime Trade Operations reported early Monday that a vessel had been struck by projectiles north of Fujairah in the United Arab Emirates. Oil prices rose, with Brent crude up 2.2% to $110.57 a barrel and West Texas Intermediate gaining 1.3% to $102.94.
The immediate focus for investors is whether Washington follows through on the auto tariff increase, how the EU responds and whether shipping risks in the Gulf continue to lift energy prices.
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