Stock exchanges in Europe plummet amidst Trump's unexpected EU tariff move
Stock markets across Europe plummeted on Friday afternoon in response to Donald Trump's announcement of considerably increased tariffs on U.S. imports from the European Union, effective June 2025. The FTSE 100 fell as much as 1.35% following the U.S. President's announcement on Truth social, where he stated that he would recommend a 50% tariff on European Union imports.
Trump's post characterized the bloc as difficult to deal with and asserted that the EU has been "formed for the primary purpose of taking advantage of the United States on TRADE." According to Trump, these "powerful Trade Barriers" and other issues have led to a Trade Deficit with the U.S. of more than $250,000,000 per year, which he deemed unacceptable.
All European continental bourses tumbled in reaction to Trump's announcement. As of 2:45pm on Friday, Germany's blue-chip Dax was down by 2.5%, with carmakers, lenders, and other major exporters leading the index's biggest fallers. Prominent car manufacturers such as Porsche and Mercedes-Benz Group saw their market capitalization drop by over 5% and 4.5% respectively. Deutsche Bank and chemicals wholesaler Brenntag both experienced losses of around 5%.
France's CAC also dropped by as much as 2.8% within two hours of the announcement. Pernod Ricard led the blue-chip index as its biggest loser, falling by as much as 5%. Other exporters, like aerospace firm Safran and energy management group Schneider, faced losses of over 2.5%.
Investment strategist Laurie James from Quilter commented on the unexpected intervention, stating that it puts to bed any illusions that Trump's tariff regime would be dialed back. The EU's impending higher tariff rate compared to China represents an almost unthinkable scenario just weeks ago. European markets, James added, will suffer as a result, reversing some of the strong momentum seen in recent months. US businesses will also be thrown into uncertainty, making strategic planning difficult.
U.S. tariffs on EU imports are expected to significantly impact European stock markets, with trade-sensitive sectors like automotive, luxury goods, and industrial goods bearing the brunt of the consequences. Companies heavily dependent on the U.S. market will likely experience sharp declines, particularly those with complex supply chains and exports to U.S. consumers.
- The unexpected tariffs announced by Donald Trump on U.S. imports from the European Union, effective June 2025, are expected to have a significant impact on the economy, particularly the finance and business sectors.
- The fallout from the proposed tariffs has already been felt in European markets, with stock markets across the continent plummeting following Trump's announcement on Truth social.
- The policy-and-legislation and politics surrounding the tariffs have raised concerns about the future of industry, both in Europe and the United States, as wars-and-conflicts and conflicts over trade might ensue.
- Markets capitalization of prominent European companies like Porsche and Mercedes-Benz Group have already dropped significantly, reflecting the general-news about the upcoming tariffs and their potential effects on the export-dependent industries.
- The increased tariffs could lead to further complications in the markets, making it challenging for businesses to plan financially and strategically, not only in Europe but also in the United States.
