LONDON — European stocks moved higher on Wednesday, as investors reacted to proposed tariffs on steel imported into the European Union.
The pan-European Stoxx 600 was up around 0.6% by 3 p.m. in London (10 a.m. ET), with most sectors and major bourses in positive territory.
The U.K. has been left fearing for its beleaguered steel industry after the European Union announced plans on Tuesday to reduce tariff-free quotas on imported steel, and to hike tariffs from 25% to 50% on any excess imports.
The industry is already facing significant pressure from unsustainable levels of global overcapacity, the bloc said. The U.K.’s steel industry warned that the EU measures could be an existential blow to the already limping sector.
Regional steel producers rose to the top of the Stoxx 600 in the wake of the news, with Luxembourg-based ArcelorMittal stock gaining 5.2%, Thyssenkrupp rising by 4.6% and Sweden’s SSAB adding 4.2%.
Autos stocks were down by around 1.7% amid widespread concern that steel tariffs will push up prices for vehicle manufacturers. BMW, down 7%, led losses in the sector after the German carmaker trimmed its margin guidance on the back of weak China sales. Daimler Truck was 3.1% lower, while Mercedes-Benz shares shed 2.7%.
“We do not contest the need for some level of protection for a commodity industry like steel but we feel that the parameters as proposed by the Commission go too far in ring-fencing the European market,” European Automobile Manufacturers’ Association Director General Sigrid de Vries said in a statement. “We need to find a better balance between the needs of European producers and users of steel in this measure.”
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France also remains in focus for regional investors after the shock resignation of French Prime Minister Sebastien Lecornu on Monday morning, before he’d even presented the fractious National Assembly with budget plans — which have undone two previous short-lived administrations.
In a surprise twist, however, French President Emmanuel Macron gave Lecornu another 48 hours for “final discussions” with rival parties to try to break the impasse. Lecornu is due to report to Macron on Wednesday evening on any potential breakthrough.
Asia-Pacific stock markets traded flat overnight, breaking ranks with Wall Street, which saw losses Tuesday.
U.S. stocks were slightly higher on Wednesday after the S&P 500 snapped a seven-day winning streak. A fall in Oracle shares called into question the sustainability of the artificial intelligence trade. The government shutdown is also in its second week.