European stocks dip as US tariff threat hits BMW, Mercedes, VW

European stocks slipped in early trading on Monday, weighed down by automakers after US President Donald Trump threatened to increase tariffs on cars imported from the European Union. The Euro Stoxx 50 index fell 0.08% by 0720GMT, while London markets remained closed for a public holiday. Car manufacturers led the losses after Trump announced on Friday that the EU had not fully complied with a previously negotiated trade agreement. BMW dropped 2.1%, Mercedes-Benz Group lost 1.9%, and Volkswagen declined 1.7%, dragging the broader index lower.

Tariff details and market dynamics

The tariff threat follows Trump’s criticism that the EU failed to fully implement commitments under the trade deal, which had set a 15% tariff level for most EU exports, including cars and auto parts. Meanwhile, technology shares moved higher, supported by continued investor demand for artificial intelligence-linked stocks, following record highs in US equities on Friday and gains across Asian markets. European equities have lagged behind US and emerging market peers since the start of the Iran war on Feb. 28, as the conflict has weighed on consumer sentiment and pressured luxury groups such as LVMH and Hermès.