European Shares Dive Amid Trump’s Tariff Threats on EU and Mexico

European shares took a hit on Monday, with the automobile sector suffering the most, as U.S. President Donald Trump threatened to impose significant tariffs on the European Union and Mexico.

This led the pan-European STOXX 600 index to drop by 0.6%, closing at 544.3 points, while other regional indexes also declined except for the UK's FTSE 100, which rose by 0.2%. Trump's Saturday announcement of a potential 30% tariff starting August 1 follows unsuccessful negotiations with major U.S. trading partners.

In response, the European Union announced an extension of its suspension of countermeasures against U.S. tariffs until early August, aiming for a negotiated settlement. Furthermore, Italy's Foreign Minister Antonio Tajani disclosed the EU's preparation of a tariff list worth 21 billion euros ($24.5 billion) on U.S. imports should talks fail. Meanwhile, European automobile shares fell 1.4%, with the retail sector down by 1%, although AstraZeneca saw a rise of 1.9% on successful drug trial results.

(With inputs from agencies.)