European Markets React to US Tariffs

European stock markets experienced significant declines on Tuesday following the announcement by US President Donald Trump of a new 25% tariff on Canadian steel and aluminum exports. This move has sparked widespread concern over the potential impact of an escalating trade war on global markets.

ECB Governor Warns of Economic Impact

Olli Rehn, a member of the European Central Bank Governing Council and Governor of the Bank of Finland, expressed concerns that the US tariffs could reduce global economic output by more than 0.5% in 2025 and 2026. This statement has added to the growing unease among investors and policymakers.

Market Movements and Currency Fluctuations

The DAX index fell by 1.29%, with Henkel seeing a dramatic drop of 10.36%. The FTSE 100 also declined by 1.21%, with International Consolidated Airlines Group losing 6.12%. The CAC 40 and Euro Stoxx 50 were not spared, decreasing by 1.31% and 1.43% respectively. Stellantis shares fell by 5.30% on both indexes. Meanwhile, the euro strengthened against the dollar, gaining 0.81% to sell for $1.09230, and the pound increased by 0.50%, selling for $1.29426.