FX.co ★ Trump’s EU Tariff Sends European Stocks Lower

European markets commenced the week on a downward trajectory, with the STOXX 50 declining by 0.8% and the STOXX 600 decreasing by 0.6%. This downturn came as a reaction to U.S. President Trump's declaration of a 30% tariff on European Union imports, slated to take effect on August 1. The European Union responded by opting not to engage in immediate retaliatory measures, choosing instead to pursue a negotiated resolution. The EU announced an extension of the suspension of its countermeasures until early August, while the European Commission underscored its readiness to safeguard EU interests. EU trade ministers are convening today to deliberate on the bloc's strategy. The automotive sector faced significant pressure, with shares of Mercedes-Benz down 1.8%, Stellantis declining 1.5%, BMW falling 1.3%, and VW dropping 1.3%. The technology sector also experienced declines, with SAP down 1.3% and ASML Holding decreasing by 0.4%. Conversely, defense stocks were predominantly on the rise, notably Thales, which saw a 1.4% increase following French President Macron's announcement of an additional €6.5 billion in military spending over the next biennium.