European stock markets were mostly in the red on Monday, pressured by heightened concerns over escalating trade tensions after U.S. President Donald Trump announced steep new tariffs on European Union imports. The move, seen as a blow to ongoing transatlantic negotiations, reignited fears of a broader trade conflict.
By 07:55 GMT, Germany’s DAX had dropped 0.7%, while France’s CAC 40 was down 0.5%. In contrast, the FTSE 100 in London edged up 0.2%, with the U.K. already having secured a trade agreement with the Trump administration.
Transatlantic Trade Strain Deepens
Trump revealed over the weekend that the U.S. would impose a 30% tariff on goods imported from both the EU and Mexico, starting August 1. This announcement comes after similar measures were introduced on imports from Japan, South Korea, Canada, and Brazil in the previous week.
European Commission President Ursula von der Leyen condemned the tariffs, warning they would severely disrupt transatlantic supply chains, harming businesses, consumers, and patients alike. While reiterating the EU’s willingness to negotiate before the deadline, she emphasized that the bloc was “prepared to defend its interests” through proportional countermeasures if needed.
The EU and the U.S. collectively account for nearly 30% of global trade and 43% of global GDP, with bilateral trade valued at approximately €1.7 trillion in 2024, or roughly €4.6 billion per day.
German Automakers Hit by Tariff Shock
Shares of major German auto manufacturers were under pressure following the tariff announcement, which offered no exemptions for the automotive sector. Shares in Volkswagen (TG:VOW3), BMW (TG:BMW), Mercedes-Benz (TG:MBG) and Porsche (BIT:1PORS) all fell more than 1%.
AstraZeneca Gains on Trial Success
On a brighter note, shares of AstraZeneca (LSE:AZN) rose after the pharmaceutical giant reported that its hypertension drug Baxdrostat successfully met both primary and secondary endpoints in a key late-stage clinical trial involving patients with resistant high blood pressure.
Oil Prices Rise as Focus Shifts to Russia Sanctions
Crude oil prices climbed on Monday, driven by speculation that Washington may unveil new sanctions on Russia, potentially disrupting global supply flows.
As of 03:55 ET, Brent crude futures were up 1.1% at $71.14 per barrel, while WTI crude advanced 1.2% to $69.25 per barrel.
Trump is expected to deliver a “major statement” on Russia later in the day, amid growing bipartisan support in Congress for a bill proposing further sanctions aimed at pressuring Moscow over the war in Ukraine. At the same time, EU diplomats are reportedly nearing consensus on a new sanctions package that may include a tighter cap on Russian oil exports.
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