European Auto Stocks Plunge Amid New U.S. Tariffs

European shares fell to their lowest in nearly two weeks following President Trump's announcement of 25% import tariffs on vehicles and foreign auto parts. The auto sector led the decline, with major companies experiencing significant losses. The tariffs are expected to increase car costs significantly.

European shares hit their lowest in nearly two weeks on Thursday as auto stocks stumbled. This downturn came after President Donald Trump announced imposing a 25% tariff on all imported vehicles and auto parts, fueling worldwide economic slowdown fears.

The pan-European STOXX 600 index fell 0.5%, after dipping as much as 1.1%. Germany's blue-chip index, a major supplier to the U.S., declined by 0.7%. Leading automakers like Volkswagen, Stellantis, BMW, and Porsche recorded notable losses, further straining the sector.

French supplier Valeo slumped 7.8%, stating it couldn't absorb the new tariffs without raising prices. The levies, effective from April 3, could increase U.S. vehicle costs significantly, highlighting the impact of interdependent supply chains. Investors are cautious as they anticipate further tariffs from Trump.

(With inputs from agencies.)