European Markets Ignore Latest Trump Threats, German Trade Surplus Shrank

Bridgette Randall
08 Jul, 2025
London

European market indexes lacked direction but retained an upward bias, as investors reviewed the latest change in the U.S. trade policy. 

Benchmark indexes in Frankfurt, Paris, Milan, and London struggled to stay above the flatline. 

The Trump administration delayed the aggressive tariff deadline to August 1 from the July 9 deadline and warned Japan and South Korea to face 25% tariffs if negotiations are not wrapped up by the end of the month. 

The European Union is looking to strike a trade framework with the U.S. that would avoid steep tariffs on vehicles, pharmaceuticals, and steel and aluminum products. 

However, agriculture and food and beverage product shipments from the European Union may avoid excessive tariffs of 25%.

The constantly changing trade policy of the Trump administration has put businesses on alert, and the European Union has ramped up its trade negotiations with China, India, and Brazil.

 

German Trade Surplus Shrank In May 

Germany's May exports increased 0.4% to €129.4 billion, imports advanced 4.2% to €111.1 billion, and the trade surplus shrank to €18.4 billion from €22.3 billion a year ago, respectively. 

Exports to the U.S. decreased 7.7% to €12.1 billion, to China declined 2.9% to €6.8 billion, and to the U.K. rose 15.1% to €3.1 billion, according to the latest data available from the Federal Statistical Office, or Destatis. 

 

Europe Stock Movers 

Vehicle makers extended their losses of the previous month, and defense stocks turned volatile in Tuesday's trading. 

Volkswagen Group AG decreased 0.9% to €90.0, Mercedes-Benz Group AG declined 0.4% to €49.72, Renault SA fell 1.4% to €39.86, and Stellantis NV edged up 0.4% to €8.42. 

Rheinmetall AG increased 1.1% to €1,823.0, MTU Aero Engines AG added 1% to €1,823.0, Safran SA inched higher 0.4% to €275.70, and Rolls-Royce Holdings PLC eased 0.8% to 962.0.