Auto Stocks Tumble Amid Tariff Turmoil

European shares hit a two-week low as auto stocks plummeted following U.S. President Trump's announcement of a 25% tariff on vehicles and parts. Major declines were felt across Germany's auto industry, impacting global markets. Urgent trade negotiations were called to prevent further economic fallout.

European stock markets saw a significant downturn on Thursday, driven by a sharp decline in auto stocks. The drop followed U.S. President Donald Trump's announcement of a 25% import tariff on vehicles and foreign-made auto parts, slated to take effect next week.

The pan-European STOXX 600 index fell 1%, reaching a two-week low, with Germany's benchmark index down 1.4%. Among the hardest hit were shares of Volkswagen, which fell 3.6%, due to its extensive supply base in Mexico and minimal U.S. manufacturing for its Audi and Porsche brands.

The ripple effect of the tariff plans was felt globally, affecting car industry stocks in the U.S. and Asia. The newly introduced tariffs prompted Germany's economy minister and auto association to issue warnings about potential harm to both European and U.S. economies, urging immediate trade discussions to avoid escalation.

(With inputs from agencies.)