European Markets Fall As Frequent U.S. Trade Policy Changes Unnerve Investors

Bridgette Randall
14 Jul, 2025
London

European markets declined on Monday as investors weighed the impact of the latest U.S. tariff threats. 

The U.S. president on Saturday threatened to impose a 30% tax on imports from the European Union and Mexico starting August 1, even as they are locked in trade negotiations. 

Trump's arbitrary trade policy changes are making it impossible to finalize a trade agreement, as the U.S. president's erratic and random threats question the trustworthiness of an agreement.

Germany's finance minister called for firm action if import taxes are levied, and France's President Emmanuel Macron urged the European Union to "resolutely defend European interests."

"We remain ready to continue working towards an agreement by August 1.

At the same time, we will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required," President of the European Commission Ursula von der Leyen responded to the latest U.S. threats. 

Investors are looking forward to the release of several key economic metrics later in the week. 

The UK’s inflation rate is expected to stay at 3.4%, and the jobless rate is likely to stay at a four-year high of 4.6%.

Eurozone industrial production and trade data from the Euro Area, Switzerland, Spain, and Italy are on tap as well.

On the earnings front, investors are awaiting results from Experian, Ericsson, Novartis, ABB, Atlas Copco, SAAB, Volvo, Rio Tinto, Aeroports de Paris, and ASML Holding.

 

Europe Stock Movers 

Defense stocks advanced after the French president announced 6.5 billion in additional military spending over the next two years. 

Thales SA edged up 1.7% to €255.30, Safran SA inched lower 0.3% to €278.70, Dassault Aviation increased 2% to €309.0, and Airbus SE declined 0.6% to €182.16. 

Automobile stocks traded down after the U.S. president threatened to impose additional tariffs on imports from the European Union. 

Volkswagen AG fell 1.8% to €92.28, Mercedes-Benz Group dropped 2% to €52.01, and Stellantis NV fell 1.1% to €8.49.