By Adria Calatayud
European stocks and yields on government bonds fell, while the euro trimmed its gains, after President Trump's threat to impose new tariffs on the European Union revived fears about trade tensions.
The top European stock indexes gave up some of the gains achieved in recent weeks after Trump launched fresh tariff threats on Friday, signaling he would soon impose a 50% rate on the European Union and warning Apple that foreign-made iPhones could face significant levies.
"Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025," Trump said on Truth Social.
The European Commission declined to comment on Trump's warning ahead of a call between EU trade chief Maros Sefcovic and Unites States Trade Representative Jamieson Greer on Friday.
Trump's comments sent the pan-European Stoxx Europe 600 index falling 1.8% in European afternoon trade, while the Euro Stoxx 50--a narrower index of eurozone blue-chip stocks--dropped 2.4%, with the auto, bank and tech leading the losses.
Among national stock indexes, France's CAC 40 and Italy's FTSE MIB were the biggest decliners, down 2.5% and 2.4%, respectively.
The euro trimmed gains against the dollar, falling to $1.1343, having hit a two-week high of $1.1375 just before the announcement, FactSet data showed.
Meanwhile, German government-bond yields--which rise when bond prices fall--extended declines, falling by 8 basis points to 2.565%, from around 2.611% beforehand, according to Tradeweb data.
Gold prices rose after the comments, which reinforced demand for safe-haven assets. Futures were up 1.7% at $3,350.60 a troy ounce and on track for weekly gains of nearly 4%.
Write to Adria Calatayud at adria.calatayud@wsj.com
(END) Dow Jones Newswires
May 23, 2025 08:53 ET (12:53 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Comments