ROME, March 12 (Xinhua) -- European stocks, particularly in the automobile sector, have faced turbulence amid speculation over new U.S. tariffs and potential European Union (EU) retaliatory measures.
The U.S. imposed a 25 percent tariff on steel and aluminum, effective Wednesday, prompting an immediate EU response with levies on American goods. U.S. President Donald Trump further escalated tensions by threatening higher tariffs on European car imports and broader restrictions on various European products, set to take effect on April 2.
The EU's countermeasures will be implemented in two phases, with the first round beginning April 1 and the second in mid-April. European Commission President Ursula von der Leyen criticized the U.S. tariffs, calling them harmful to businesses and consumers. She emphasized that Europe's response is "strong but proportionate" and reaffirmed the EU's willingness to engage in dialogue.
European stocks struggled in anticipation of the tariffs. The pan-European Stoxx 600 index fell 0.9 percent at the start of trading on both Friday and Monday before dropping 1.9 percent on Tuesday. Although it rebounded slightly on Wednesday, closing 0.9 percent higher, it remained nearly 3 percent below its peak from the previous Thursday.
The automobile sector was among the hardest hit. The Stoxx index for automobiles and parts declined 3.7 percent on Tuesday. Major manufacturers saw stock declines, with Volkswagen down 5.4 percent, Porsche 2.8 percent, Mercedes-Benz 2.5 percent, and BMW 1.9 percent. On Wednesday, the sector's index remained flat despite the broader market's recovery.
Though Tesla is not traded in Europe, the U.S. electric carmaker suffered a 10.7 percent drop in value over the past week amid declining sales and political backlash. European sales of Tesla vehicles fell 45 percent in January compared to the same month a year earlier, according to the European Automobile Manufacturers' Association.
