European Markets Slide as New US Tariffs Take Effect

European stock markets experienced a sharp decline on Wednesday as investors reacted to the implementation of new US tariffs.

The uncertainty surrounding global trade and the potential for retaliatory measures weighed heavily on market sentiment.

The pan-European Stoxx 600 index fell by 3.08% in early trading, with all sectors facing losses. Industries hit the hardest included healthcare (-4.5%), mining (-3.3%), and oil and gas (-4.2%).

Among major European indexes:

• France’s CAC 40 declined by 2.7%.

• Germany’s DAX dropped 3.1%.

• The UK’s FTSE 100 fell by 2.6%.

This downturn followed a brief recovery in European markets on Tuesday, which had snapped a four-day losing streak.

The market slide was fueled by new US tariffs on imports from multiple countries, including a 104% duty on Chinese goods. The US has also hinted at imposing major tariffs on pharmaceuticals and increased rates on international postal shipments from China.

In response, China announced retaliatory tariffs of 84% on US goods, escalating concerns about a prolonged trade dispute. Other countries, including Canada, have also signaled plans for countermeasures, such as a 25% tariff on US-made vehicles.

Investor Response and Economic Impact

• Banking stocks saw significant losses, with Europe’s banking sector down 4.1%. Major institutions such as UBS (-5.7%), Barclays (-5.4%), and BNP Paribas (-5%) faced notable declines.

• Investors moved toward safer assets, leading to a drop in short-term government bond yields across France, Italy, and the UK.

• Germany’s 10-year bond yield dipped as investors sought stability in Europe’s largest economy.

With input from CNBC and the Washington Post.