European Markets Fall Amid Renewed U.S. Tariff Threats

Bridgette Randall
02 Jun, 2025
London

European stock market indexes turned lower amid renewed trade tensions with the U.S. 

Benchmark indexes in Frankfurt, Paris, Milan, and London decreased amid dimming prospects of a trade agreement in the near future. 

The U.S. president reignited trade tensions after Donald Trump announced he would impose a 50% duty on steel imports from key partners from June 4.  

The European Union criticized the proposed duty undermines the efforts to reach a "negotiated solution."  

In addition, the U.S. president accused China of violating a verbal agreement struck last month in Geneva without offering any concrete evidence.  

Constantly changing U.S. trade policy has disrupted global supply chains, and companies in Europe fear that the Chinese suppliers will accelerate dumping of unsold goods into world markets. 

 

Europe Indexes and Yields

The DAX index decreased by 0.1% to 23,978.66, the CAC-40 index edged lower 0.2% to 7,737.43, and the FTSE 100 index advanced 0.1% to 8,780.12.

The yield on 10-year German bonds inched higher to 2.53%, French bonds increased to 3.19%, UK gilts moved up to 4.68%, and Italian bonds edged higher to 3.53%.

The euro increased to $1.14; the British pound was higher at $1.35; and the U.S. dollar was lower and traded at 81.91 Swiss cents.

Brent crude increased $1.65 to $64.43 a barrel, and the Dutch TTF natural gas was higher by €0.44 to €34.30 per MWh.

 

Europe Stock Movers 

Salzgitter AG declined 0.9% to €20.82, and ThyssenKrupp AG dropped 2.5% to €8.37. 

Defense and security-related stocks advanced for the ninth week in a row after Ukraine stepped up drone attacks deep inside Russia. 

Rheinmetall AG gained 0.8% to €1,922.0, MTU Aero Engines rose 0.3% to €350.20, Dassault Aviation SA added 1.4% to €323.40, and Rolls-Royce Holdings PLC added 0.2% to 868.60 pence.