EUROPEAN shares closed slightly lower on Thursday after US President Donald Trump threatened to impose tariffs on alcoholic products from the European Union, further aggravating a full-blown global trade war.
The pan-European Stoxx 600 was 0.15 per cent lower at 540.44 points, after closing higher on Wednesday.
In his latest pronouncement, Trump said he would put a 200 per cent wine tariff on all wines and other alcoholic products coming out of EU countries if the bloc did not remove its tariff on whiskey.
Spirit-makers Pernod Ricard and Campari fell 4 per cent and 4.3 per cent respectively, with the food and beverages sector lost 0.2 per cent.
Hennessy cognac maker LVMH was off 1.1 per cent.
“It’s becoming really hectic now because the tariffs are going on and off and no one knows how far this could go,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
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“One thing, whether they go live or whether they are negotiation tactics, is that they raise inflation expectations which is why markets are panicked right now.”
Automobiles and parts shed 1.7 per cent, leading sectoral declines. Carmaker Stellantis and car-parts supplier Valeo fell 2.3 per cent and 6.4 per cent respectively.
Countering losses, telecommunications gained 1.4 per cent while healthcare stocks were 0.5 per cent higher, boosted by a 3.4 per cent rise in Novo Nordisk. Kepler Cheuvreux raised the drugmaker’s rating to “buy” from “hold”.
Trump threatened on Wednesday to ratchet up a global trade war with further tariffs on European Union goods, just hours after retaliatory levies announced by the EU.
The chaos around the implementation of Trump’s trade duties has generated extreme volatility in global markets, with analysts worrying that tariff uncertainties could dent economic growth.
European truck makers declined sharply after the US Environmental Protection Agency’s (EPA) decision to start efforts to reverse the Joe Biden administration’s vehicle emissions rules.
Daimler Truck lost 4.4 per cent and was set for its worst day on record, while Volvo shed 2.2 per cent and Traton lost 2.6 per cent.
A key focus was Germany, where the parliament began a special session to debate a 500-billion euro fund for infrastructure and sweeping changes to borrowing rules to bolster the country’s defence.
Russia and Ukraine also remained in the spotlight after Russia agreed with US proposals for a ceasefire in Ukraine but said that many details needed to be sorted out.
Allegro jumped 13.6 per cent to top the Stoxx 600 and was set for its best day in nearly two years after the e-commerce platform forecast a rise in 2025 earnings in its home market and proposed a share buyback of around 1.4 billion zlotys (S$486.3 million). REUTERS
