European stocks plunged to the lowest in more than a year on Monday, as President Donald Trump issued a fresh tariff threat to China and foreign leaders raced to the negotiating table to persuade him to lower his steep tariff charges.
The Stoxx Europe 600 Index was 4.5% lower at the close in London, the lowest since end-January 2024, having earlier shed as much as 6.5%. The DAX slid 4.2%, recouping some of its earlier 10% plunge.
Shortly before the closing bell in Europe, Trump threatened to impose an additional 50% tariff on China unless Beijing withdraws a 34% retaliatory duty on US goods. He also vowed to abandon talks with China, indicating he is in no mood to back down in his trade conflict despite the huge selloff in stock markets.
Trump said, however, that negotiations with other countries would start immediately. He held a call with Japan's Prime Minister Shigeru Ishiba on the issue, while European Commission President Ursula von der Leyen said the bloc is ready to negotiate with the US on tariffs. Israeli Prime Minister Benjamin Netanyahu is also due to meet with Trump on Monday.
"Even though negotiations between the US and some trading partners have reportedly been launched, a major reversal of the US administration before the implementation date on Wednesday is unlikely," said Wolf von Rotberg, equity strategist at Bank J. Safra Sarasin.
The full extent of economic fallout from tariffs is not yet visible and risks around it remain skewed to the downside, von Rotberg added.
Sweden's OMX Stockholm 30 Index was down 4.7%, effectively entering a bear market. That's after indexes in Italy, France, Switzerland and Germany slid into correction territory last week.
Source : Bloomberg
