Europe Markets Deepen Losses After Trump Tariffs Raised Prospects of Global Recession

Bridgette Randall
03 Apr, 2025
London

European markets extended weekly losses after investors digested the impact of the newly announced U.S. tariffs. 

Benchmark indexes in Frankfurt, Paris, and London fell between 1% and 2% amid growing worries that the U.S. reciprocal tariffs are likely to ignite a wider trade war and contribute to the economic slowdown.

Investors are worried that the U.S. tariffs of 25% on European automobiles and 20% on goods made in the European Union are likely to slow down exports and negatively impact corporate earnings. 

The U.S. president announced reciprocal tariffs of at least 10% on all imported goods and imposed larger tariffs on its key trading partners—China, Japan, South Korea, and India.

The so-called tariffs, otherwise known as import taxes, are generally paid by the importing company based in the U.S. and are passed on to the final customers.

On the economic front, producer price inflation in the eurozone in February increased at an annual pace of 3% in February and accelerated from the 1.7% in January, according to the statistical agency Eurostat.

The measure of wholesale inflation accelerated for the third consecutive month, largely because of a pickup in the annual pace of energy inflation to 7.4% from 3.4% in January.

 

Europe Indexes and Yields

The DAX index decreased by 2.1% to 21,911.47, the CAC-40 index edged lower 2.1% to 7,691.50, and the FTSE 100 index declined by 1.2% to 8,500.52.

The yield on 10-year German bonds inched lower to 2.65%, French bonds decreased to 3.37%, the UK gilts moved down to 4.57%, and Italian bonds edged lower to 3.77%.

The euro increased to $1.09; the British pound was higher at $1.31; and the U.S. dollar was lower and traded at 87.05 Swiss cents.

Brent crude decreased $2.57 to $72.38 a barrel, and the Dutch TTF natural gas was lower by €0.69 to €40.31 per MWh.

 

Europe Stock Movers 

Luxury stocks plunged after the U.S. unveiled reciprocal tariffs on imports. 

LVMH declined 4% to €551.20, Salvatore Ferragamo SpA dropped 2.2% to €5.92, Kering SA down 4.2% to €184.10, and Hermes International SCA fell 2.9% to €2,354.0.

Adidas AG plunged 10% to €198.65, and Puma SE dropped 11.9% to €20.12.