European stock markets ended slightly lower on Thursday after U.S. President Donald Trump issued a warning about imposing tariffs on alcoholic beverages from the European Union, further intensifying the ongoing global trade war.
The pan-European STOXX 600 index declined by 0.2%, reversing the gains recorded in the previous session on Wednesday.
In his latest statement, Trump announced plans to introduce a 200% tariff on all wines and other alcoholic beverages imported from EU nations unless the bloc removed its existing tariff on whiskey.
Shares of spirit producers Pernod Ricard and Campari dropped by 4% and 4.3%, respectively, while the food and beverages sector as a whole slipped 0.2%.
LVMH, the company behind Hennessy cognac, saw its shares fall by 1.1%.
“It’s becoming really hectic now because the tariffs are going on and off and no one knows how far this could go,” stated Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
“One thing, whether they go live or whether they are negotiation tactics, is that they raise inflation expectations which is why markets are panicked right now.”
Leading sectoral declines, the automobiles and parts sector dropped by 1.7%. Among notable declines, car manufacturer Stellantis lost 2.3%, while car-parts supplier Valeo plummeted by 6.4%.
Offsetting some of the losses, telecommunications stocks gained 1.4%, and healthcare shares increased by 0.5%, buoyed by a 3.4% rise in Novo Nordisk. Kepler Cheuvreux upgraded the drugmaker’s rating from “hold” to “buy.”
On Wednesday, Trump escalated the global trade war by threatening to impose additional tariffs on EU products, just hours after the European Union announced its retaliatory duties.
The unpredictability surrounding Trump’s trade policies has led to significant turbulence in global markets, with analysts expressing concerns that tariff uncertainty could negatively impact economic growth.
Shares of European truck manufacturers tumbled following the U.S. Environmental Protection Agency’s (EPA) decision to initiate efforts to roll back vehicle emissions regulations established by the Joe Biden administration.
Daimler Truck dropped 4.4%, on track for its worst trading day ever, while Volvo and Traton declined by 2.2% and 2.6%, respectively.
Germany remained a focal point, as the country’s parliament convened a special session to discuss a proposed 500 billion euro fund aimed at improving infrastructure and implementing major adjustments to borrowing regulations to strengthen national defense.
Meanwhile, Russia and Ukraine continued to attract attention after Russia expressed agreement with U.S. proposals for a ceasefire in Ukraine, although Moscow noted that numerous details still required negotiation.
Allegro surged by 13.6%, topping the STOXX 600 index and marking its best performance in nearly two years.
The e-commerce company projected an increase in earnings for 2025 in its home market and announced a share buyback plan valued at approximately 1.4 billion zlotys ($364 million).