European stocks suffered their worst day in three months as markets opened sharply lower following former President Donald Trump’s announcement of sweeping new tariffs on European auto imports. The Stoxx 600 index plunged 2.1% in early trading, with German automakers bearing the brunt of the selloff.

Key Impacts:

• Volkswagen shares dropped 5.8%, BMW fell 4.9%
• Luxury goods sector hit on US demand concerns (LVMH -3.2%)
• Euro weakened to $1.07, lowest since November 2024
• Bond yields fell as investors fled to safety

“These tariffs couldn’t come at a worse time for European exporters already struggling with weak demand,” said UBS European equity strategist. The EU Commission announced an emergency meeting to prepare retaliatory measures.