European Stocks Decline as Investors Await Clarity on Trump’s Tariffs

European equity markets opened lower on Wednesday, as investors remained cautious ahead of the anticipated tariff announcement by the Trump administration. Markets are seeking more clarity on the scale and impact of the proposed trade barriers, which could significantly affect global trade and economic growth.

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European Markets at a Glance

At 02:02 ET (07:02 GMT):

• Germany’s DAX dropped 0.4%.
• France’s CAC 40 slipped 0.3%.
• U.K.’s FTSE 100 fell 0.3%.

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“Liberation Day” Tariffs & Market Impact

• The White House confirmed on Tuesday that President Trump will impose new tariffs later today, labeling the event as “Liberation Day”.
• The tariffs will take immediate effect, but key details remain unclear.
• The only confirmed measure so far is a 25% tariff on auto imports, set to begin on April 3.

Reports indicate that:

• The Washington Post suggested tariffs could impact 20% of U.S. imports.
• CNBC reported that Treasury Secretary Scott Bessent stated Trump will impose the highest possible reciprocal tariffs on major trading partners.

This uncertainty has increased market volatility, with the S&P 500 entering correction territory last month after a 10% drop from its recent highs.

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Europe’s Response to U.S. Tariffs

• France’s Industry Minister Marc Ferracci stated that Europe will respond proportionally to U.S. tariffs but will not escalate trade tensions.
• The European Central Bank (ECB) is closely monitoring developments, having cut interest rates six times in nine months.
• The ECB’s next rate decision is scheduled for April 17, with tariff risks being a key challenge to its inflation management strategy.

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Italian Banking Sector in Focus

• UniCredit (ETR:CRIG) announced that Italy’s market watchdog (Consob) has approved its €14 billion all-share bid for Banco BPM (BIT:BAMI).
• This marks the final regulatory step before the offer, which will run from April 28 to June 23.
• Meanwhile, UniCredit received ECB approval last month to acquire just under 30% of Commerzbank (ETR:CBKG), though a full takeover remains uncertain.

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Key Takeaways

• European markets opened lower due to uncertainty over Trump’s tariffs.
• Trump’s trade measures could impact 20% of U.S. imports, but details remain unclear.
• The S&P 500 has already entered correction territory, reflecting market concerns.
• Europe is expected to respond proportionally but won’t escalate tensions.
• The Italian banking sector is active, with UniCredit’s €14 billion bid for Banco BPM moving forward.

Investors will closely watch Trump’s tariff announcement later today for more clarity on trade policy and its global economic impact.