Shares in European banks and retail groups were among the hardest hit on Thursday following U.S. President Donald Trump’s market-rattling announcement of sweeping new tariffs on all imports.
Trump announced his broadest slate of tariffs to date on Wednesday, saying he would slap a baseline 10% duty on all foreign imports into the U.S. and impose greater levies on several longstanding trading partners in a bid to respond to perceived unfair trade practices.
The European Union was included in a number of countries set to face elevated so-called "reciprocal" tariffs designed to match foreign trade charges and other non-trade barriers. The White House considers these nations to be "bad actors" on trade.
A tracker of Eurozone lenders slipped by 2.8%, as investors fretted over the impact of the levies on the broader economic outlook. Analysts at J.P. Morgan said the policies, if sustained, will likely plunge the global economy into recession this year.
Other analysts speculated that, despite signs that a trade spat with the U.S. could refuel inflationary pressures, the European Central Bank may also be forced to slash interest rates even faster to provide support to growth.
Bank-heavy indices in Spain and Italy both dropped, with names like Banco Santander (BME:SAN), Banca Monte dei Paschi di Siena (BIT:BMPS), and Unicredit (BIT:CRDI) all sliding by more than 2%.
Meanwhile, luxury goods companies, such as jewellery maker Pandora (OTC:PNDRY) A/S (CSE:PNDORA), Cartier-parent Richemont (SIX:CFR), Dior-owner LVMH (EPA:LVMH), and rival Kering (EPA:PRTP), declined, with both Switzerland and the European Union now facing fresh U.S. tariffs.
German athletic apparel players Adidas AG (ETR:ADSGN) and Puma SE (ETR:PUMG) also tumbled, as the levies threatened to dent some of their crucial supply markets.
Broader European equity indices dropped. At 03:02 ET (07:02 GMT), the DAX index in Germany had shed 2.3%, the CAC 40 in France had fallen 2.2% and the FTSE 100 in the U.K. had lost 1.5%.
