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Carmakers led a decline in European stocks on Thursday, after US President Donald Trump threatened to hit EU goods with 25 per cent tariffs.
The broad Stoxx Europe 600 fell 0.4 per cent, while Germany’s blue-chip Dax index, which includes big exporters, dropped 0.9 per cent.
Trump made the threat on Wednesday during the first meeting of his cabinet since he took office last month, saying the EU was “formed to screw the United States.
“We have made a decision and we’ll be announcing it very soon,” Trump said when asked about his plans for EU tariffs. “It’ll be 25 per cent generally speaking, and that will be on cars and all other things.”
Germany’s Volkswagen fell 1.7 per cent, Mercedes-Benz dropped 1.8 per cent and Porsche lost 2.4 per cent. Stellantis dropped 2.6 per cent in Milan.
“The latest tariffs headlines are a reality check for the autos sector and the broader EU market,” said Emmanuel Cau, analyst at Barclays.
Italian luxury-car maker Ferrari slipped as much as 7.7 per cent after its largest shareholder, the Agnelli family’s holding company, said it planned to sell a stake worth about €3bn.
European stocks have outpaced the US in the month since Trump’s inauguration, as hopes rose that the region might escape a worst-case scenario trade war.
The relatively subdued reaction among European car stocks on Thursday is because of traders’ fatigue over Trump’s start-stop trade war, said analysts.
“Markets have remained resilient because they do not fully believe President Trump,” said Tomasz Wieladek, an economist at asset manager T Rowe Price. “But if [carmakers] are hit with 25 per cent tariffs it will make their exports to one of the world’s largest auto markets significantly less profitable.”
Emanuele Orsini, Confindustria president, an influential confederation of Italian businesses, described Trump’s tariff threat as “an attack on European businesses and European jobs”, adding that “the real objective is the deindustrialisation of our continent.”
AP Møller-Maersk, the world’s second-largest container shipping line, dropped 2.5 per cent.
Vaccine makers dropped after Bloomberg reported that US health officials were weighing up pulling funds for Moderna’s bird flu vaccine. Novo Nordisk dropped 1 per cent, while Moderna shares were down 3.4 per cent in pre-market trading.
US Nasdaq and S&P 500 futures were both up 0.6 per cent after chipmaker Nvidia reported a surge in forth-quarter profit and sales. Its shares rose 1.3 per cent in pre-market trading in New York, while in Europe ASML dipped 0.6 per cent.
