European markets are expected to open sharply lower Monday after U.S. President Donald Trump imposed trade tariffs on several countries and threatened to do the same with the European Union and U.K.
The U.K.’s FTSE 100 index is expected to open 116 points lower at 8,563, Germany’s DAX down 498 points at 21,217, France’s CAC down 166 points at 7,772 and Italy’s FTSE MIB down 901 points at 35,708, according to data from IG.
European markets are set to react negatively to President Trump’s decision at the weekend to slap 25% tariffs on imports from Mexico and Canada and a 10% levy on goods from China. The tariffs are set to come into effect Tuesday. The U.S. does about $1.6 trillion in business with the three countries.
Canada has retaliated with its own sanctions on U.S. imports and Mexico has threatened to do the same.
When asked on Sunday about the prospect of tariffs on goods from the U.K. and European Union, Trump told the BBC that both were “out of line” but that the EU was worse. He said a deal could be “worked out” with the U.K., a country with whom the U.S. has a more balanced trade relationship.
Trump described the U.S. trade deficit with the EU as an “atrocity,” repeating his previous comments that the bloc had “really taken advantage” of the United States. Officials from the EU signaled previously that the bloc could respond to any future U.S. tariffs “in a proportionate way.”
Asia-Pacific markets traded lower overnight after Trump’s tariff move, while U.S. stock futures tumbled Sunday night as investors weighed new U.S. tariffs and their potential impact on the economy and corporate profits.
Earnings in Europe come from Julius Baer on Monday, while data releases include the latest euro zone inflation data.