European Stocks Sink as EU, China Retaliate on Trump’s Tariffs

Levin Stamm, Julien Ponthus and Sagarika Jaisinghani

Wed, Apr 9, 2025, 8:46 AM 6 min read

(Bloomberg) -- European stocks fell to the lowest since January 2024 arsenic the EU and China retaliated with higher tariffs connected the US, escalating President Donald Trump’s commercialized war.

The Stoxx Europe 600 Index tumbled 3.5% by the close, with astir 97% of its constituents successful the red. Health care, vigor and existent property stocks fell the most.

The European Union approved tariffs connected €21 cardinal ($23.2 billion) of US goods successful retaliation for the 25% duties Trump imposed past period connected the bloc’s alloy and aluminum exports. China said it would rise the tariff connected US goods to 84% from 34%, effectual April 10.

US imports from the European Union volition beryllium taxed astatine a 20% complaint nether the latest tariffs, portion Trump’s latest levies connected China instrumentality the cumulative complaint announced this twelvemonth to 104%. The moves person shaken planetary markets and plus classes, with US authorities bonds sliding amid increasing cracks successful the haven presumption of Treasuries.

European drugmakers were among the biggest laggards aft Trump said “a large tariff” connected the manufacture would beryllium coming soon. Novo Nordisk A/S fell 6.9%, Novartis AG dropped 6.4% and Roche Holding AG was down 5.8%.

“This isn’t a bargain accidental yet,” said Frederique Carrier, caput of concern strategy for RBC Wealth Management successful the British Isles and Asia. “We’re waiting for immoderate clarity connected wherever tariffs volition land, and the longer this goes on, the large hazard of an mishap successful fiscal markets.”

Dominik Schmidlin, caput of concern strategy and probe astatine St. Galler Kantonalbank, said helium expects much volatility implicit the coming weeks. “We are positioned defensively amid the existent uncertainty with a flimsy underweight connected equities.”

Trump’s sweeping tariffs are threatening to upend the planetary economical bid and raising fears astir a recession. Europe’s equity benchmark scale is present down for this year, pursuing a grounds first-quarter outperformance against US stocks successful dollar terms.

“The marketplace is panicking, and for the close reasons,” said Charu Chanana, main concern strategist astatine Saxo Markets. “This isn’t conscionable astir tariffs oregon FX — it’s astir superior flows, geopolitics and fiscal sustainability colliding successful existent time.”

Here is what marketplace participants are saying:

Laurent Lamagnere, caput of improvement astatine Alphavalue

“There are concerns present that determination could beryllium precise dense losses among hedge funds seeking to unwind highly leveraged basis-trades. There’s a consciousness of panic successful immoderate areas of the marketplace that that thing systemic could hap should a large hedge money autumn portion unwinding a large trade. There’s besides speculation floating astir that the Fed could intervene.”