Europe Markets Extend Losses Amid Looming U.S. Import Tax on Vehicles

Bridgette Randall
31 Mar, 2025
London

European stock market indexes struggled to advance in Monday's trading ahead of the looming U.S. tariffs this week. 

Benchmark indexes in Frankfurt, Paris, Milan, and London declined 1% as investors fear a widening trade war's negative impact on the economy and corporate earnings. 

The 25% import tax announced by the White House is likely to lower vehicle exports from the European Union to the U.S. 

The U.S. is the second largest market for the passenger cars made in the European Union, and about 704,000 vehicles were shipped across the Atlantic in 2024. 

The European carmakers are expected to increase the final U.S. sale price between $3,000 and $10,000 after the implementation of the import tax.

On the economic front, Germany's consumer price inflation slowed to 2.2% in March from 2.3% in the previous month, according to a report released by the Federal Statistical Office. 

The overall inflation slowed because of a moderation in services inflation to 3.4% from 3.8% and a further decline in energy prices to 2.9% from 2.4% in the previous month, respectively. 

Core inflation, which excludes food and energy prices, slowed to 2.5% from 2.7% in the previous month. 

 

Europe Indexes and Yields

The DAX index decreased by 1.1% to 22,202.31, the CAC-40 index edged lower 1.05% to 7,836.77, and the FTSE 100 index declined by 0.9% to 8,581.47.

The yield on 10-year German bonds inched lower to 2.67%, French bonds decreased to 3.39%, the UK gilts moved down to 4.66%, and Italian bonds edged lower to 3.81%.

The euro increased to $1.08; the British pound was higher at $1.30; and the U.S. dollar was lower and traded at 87.96 Swiss cents.

Brent crude decreased $0.13 to $72.63 a barrel, and the Dutch TTF natural gas was lower by €0.27 to €40.63 per MWh.

 

Europe Stock Movers

Associated British Foods decreased 1.1% to 1,918.0 pence, and the company's Primark chief executive, Paul Marchant, resigned following allegations of improper behavior. 

Pets At Home Group PLC dropped 9% to 215.60 pence after the specialty retailer estimated lower earnings in fiscal 2026.

3i Group PLC decreased 3.5% to 3,598.0 pence after the UK-based private equity group issued a preliminary update for the current fiscal year ending in March 2025.