European Markets Stall as Trump’s Tariff Threats Stir Global Trade Uncertainty

European shares remained largely unchanged on Tuesday, as investors weighed the potential impact of fresh tariff threats from U.S. President Donald Trump. The pan-European STOXX 600 index held steady at 543.22 points in early trading, reflecting investor caution amid rising geopolitical and trade tensions. Markets across the region paused for direction as they monitored the evolving situation.

Trump announced plans to implement significantly higher tariffs on imports from 14 countries, including Japan and South Korea, starting August 1. Although the U.S. administration initially set a July 9 deadline for new trade deals, it has now been pushed back, with Trump signaling flexibility if countries submit alternative proposals. These developments have raised fresh concerns among global trading partners.

In contrast to other affected nations, the European Union was notably absent from the list of countries receiving tariff warning letters. EU sources indicated that the bloc is aiming to secure exemptions from the proposed 10% baseline tariff. This potential reprieve helped prevent a broader sell-off in European equities but did little to spark optimism.

Sector-wise, European real estate stocks declined by 0.6%, while basic resources gained 0.7%, reflecting mixed investor sentiment. On the corporate front, Belgian biotech company ArgenX saw its stock rise 1.4% after Deutsche Bank upgraded it to “buy” from “hold,” offering a rare bright spot in a flat market.

Economic data from Germany further weighed on sentiment, with exports falling more than anticipated in May. This marked the second consecutive month of declining U.S. demand, following a temporary surge as companies rushed shipments ahead of expected tariffs. The slowdown signals deepening concerns about the global ramifications of America’s increasingly aggressive trade policy.

Source: Reuters