European Stocks Fall as Auto Tariffs Weigh on Markets

European stock markets declined on Thursday, reacting to U.S. President Donald Trump’s new 25% tariffs on all imported automobiles and auto parts. Investors remain cautious ahead of Trump’s expected announcement of broader trade levies on April 2.

Market Performance (As of 08:05 GMT)

• Germany’s DAX: -1.5%
• France’s CAC 40: -1.0%
• UK’s FTSE 100: -0.5%

Auto Industry Under Pressure

• Trump’s tariffs, set to take effect on April 2, aim to boost domestic production and cut trade deficits.
• Europe exported 800,000 vehicles to the U.S. last year, four times the number of U.S. cars sent to Europe.
• Volkswagen (ETR:VOWG_p) is particularly vulnerable, as 43% of its U.S. sales come from Mexico.
• Other major automakers impacted include:
  • Mercedes-Benz (ETR:MBGn)
  • BMW (ETR:BMWG)
  • Stellantis (NYSE:STLA)
  • Porsche (ETR:PSHG_p)

The European Commission announced that it will assess the tariffs and explore negotiations, but fears of a trade war remain high.

Trump’s “Liberation Day” Tariffs

• Trump has dubbed April 2 as “Liberation Day”, with plans to introduce reciprocal tariffs on imports from at least 15 major trading partners.
• The move could significantly disrupt global trade and trigger retaliatory measures.

Corporate Updates: H&M Struggles, Next Surges

• H&M (ST:HMb): Reported weaker-than-expected Q1 sales, citing a slow start to the spring and summer season.
• Next (LON:NXT): Surpassed £1 billion in annual profit for the first time, with a 10% increase in earnings. The retailer also raised its profit guidance for 2025.