European Markets Decline Amidst US Tariff Announcement; Maersk Drops 7%

European stock markets saw significant declines on Thursday morning following US President Donald Trump’s announcement of stronger-than-expected trade tariffs.

The Stoxx 600 index dropped 1.27% by mid-morning in London, with notable losses in companies with global supply chains. German sportswear brand Adidas saw a sharp drop of 10.4%, while shipping giant Maersk, often considered a key indicator of global trade, fell by 7.2%.

The announcement of a 25% tariff on imported vehicles to the US initially caused the Stoxx Autos index to plummet by over 2%. However, the index later pared its losses, settling down by just 1%. Other sectors that faced significant losses included banks, which dropped by 2.8%. In contrast, utilities stocks, typically seen as a safe haven in times of market volatility, saw a slight rise of 1.9%.

Trump’s new tariff policy, which he signed on Wednesday, is described as a “reciprocal tariff” approach, setting a 10% baseline tariff across the board, with higher tariffs applied to specific countries. This includes a 20% tariff on goods from the European Union and a 10% tariff on goods from the United Kingdom. In response, the European Commission expressed concerns and signaled preparations for countermeasures if negotiations with the US do not yield satisfactory outcomes.

China, a major trade partner for the US, was also hit with a new tariff of 34%, effectively increasing its overall tariff rate to 54% when factoring in previous duties on US imports. China has since warned of retaliatory actions if the US moves forward with these tariffs.

The impact of the tariff news extended beyond Europe, affecting global markets. The UK’s FTSE 100 saw a 1% decline, while France’s CAC 40 and Germany’s DAX faced larger losses, down 1.6% and 1.5%, respectively. Health-care stocks bucked the trend, edging up by 0.17%, as pharmaceutical goods were not immediately subject to the new tariffs.

The market reaction to Trump’s announcements was also felt in the US After-hours trading on Wednesday saw major losses, with tech companies like Apple, Tesla, and Amazon experiencing declines of 7%, 6%, and 5%, respectively. Investors are now concerned about the long-term effects of the tariffs on global supply chains, inflation, and economic growth.

CNN, CNBC, and Politico contributed to this report.