European Markets Decline Amid New U.S. Auto Tariffs

European stocks experienced a notable decline, with the Stoxx 600 index falling nearly 0.7% and the Stoxx Europe autos index shedding 2.2%. The Jeep manufacturer Stellantis saw a decrease of 4.5% in its shares, while Mercedes-Benz and BMW recorded declines of 3.6% and 2.5%, respectively. This downturn followed the announcement of a 25% tariff on all cars not manufactured in the United States, set to take effect on April 2. The automotive sector reacted sharply, with shares of key automakers like Stellantis and Mercedes-Benz dropping by as much as 5.6%.

In contrast, British retail giant Next reported annual profits of £1.011 billion ($1.3 billion) for 2024, marking a 10.1% increase from the previous year and surpassing the billion-pound milestone for the first time. The company’s total group sales rose to £6.3 billion, an 8.2% increase. Despite the positive performance, Next maintained its sales guidance at 3.5% for the second half of the year due to anticipated tax rises impacting consumer confidence.

In the broader market context, U.S. stock futures showed slight gains despite falling automaker shares, with General Motors and Ford experiencing decreases of 7% and 5%, respectively. The European automotive market, which had a trade surplus with the U.S. of €102 billion ($109.8 billion) in 2024, now faces uncertainty due to rising tariffs. President Trump also warned of potentially larger tariffs if the EU and Canada collaborate in a manner that could harm the U.S. economy. The rising average tariff rates are expected to reach levels not seen since before World War II, with current estimates suggesting they could rise from 8% to as high as 15% in the near future.

Source: CNBC