European stock markets came under pressure following U.S. President Donald Trump's announcement of sweeping new import tariffs. According to the White House, a baseline 10% tariff will be imposed on all foreign imports to the U.S., with higher rates applied to several key trading partners, including the European Union. These measures are intended as a response to what the administration describes as unfair trade practices by other nations.
The new trade restrictions have raised concerns among investors and analysts. J.P. Morgan forecasts that if this tariff policy persists, it could push the global economy into a recession this year. Financial markets reacted with falling stock prices, particularly in the European banking and retail sectors.
Eurozone banking stocks saw a significant decline, with the sector index dropping by 2.8% amid fears of potential economic fallout from the tariffs. Leading the downturn were:
Banco Santander;
Banca Monte dei Paschi di Siena;
Unicredit.
These companies experienced losses exceeding 2%, particularly affecting indices with a high concentration of banking assets in Italy and Spain.
The new U.S. tariffs have also impacted the luxury goods sector, leading to stock declines among major European brands. Companies affected include:
Pandora;
Richemont, parent company of Cartier;
LVMH owner of Dior;
Kering, parent company of Gucci and Yves Saint Laurent.
The losses in this segment are attributed to the fact that both Switzerland and the European Union now face increased tariffs on exports to the U.S., creating additional barriers for businesses reliant on international markets.
The negative trend extended to the sportswear industry. German companies Adidas and Puma saw declines in their stock prices as the new tariffs threaten to increase supply chain costs for their U.S. operations. This could have long-term implications for their global business strategies.
Major European stock indices also recorded losses:
DAX (Germany) fell by 2.3%;
CAC 40 (France) declined by 2.2%;
FTSE 100 (United Kingdom) dropped by 1.5%.
These figures reflect market reactions to U.S. trade policies and growing uncertainty in the global economy. Analysts suggest that future developments in international trade relations will play a crucial role in shaping financial market trends in the near term.
