European Stocks Slump Amid Trump's Tariff Threat

European stocks saw a downturn due to impending tariffs from Donald Trump's administration. Automakers led the decline, with concerns of another global trade war looming. Notably affected sectors include the auto sector, retail, and mining. Investors remain cautious as geopolitics and China trade tensions factor in.

European stocks suffered a decline as markets reacted to tariff threats from U.S. President-elect Donald Trump. Automakers were the most affected, leading the downturn amid fears of a rekindled global trade war.

Trump's proposed 25% import tariffs on Canada and Mexico, along with an extra 10% on China, have rattled investor confidence. Such measures threaten to override the positive sentiment seen after Scott Bessent's nomination as U.S. Treasury secretary.

The pan-European STOXX 600 index dipped by 0.5%, primarily impacting carmakers like Stellantis and Volkswagen. Several sectors including retail and mining also faced challenges. Meanwhile, Melrose Industries saw gains following an upgrade from J.P. Morgan.

(With inputs from agencies.)