European stocks close lower as tariff tensions worsen

By Mucahithan Avcioglu

ISTANBUL (AA) - European stock markets closed Wednesday down as investors' worries escalated with EU and Chinese announcements of retaliatory tariffs against the US.

The stocks fell for three consecutive sessions after US President Donald Trump last week announced the imposition of sweeping tariffs on over 180 countries, ranging from 10% to 50%.

EU member states voted Wednesday in favor of European Commission trade countermeasures against new US tariffs entering into force next week. The countermeasures, set to go into force next Tuesday, are expected to impact many imports such as motorcycles, agriculture, and clothing worth €21 billion ($23 billion).

China on Wednesday raised additional tariffs on all US imports to 84%, further escalating the trade war with Washington, after Trump imposed 50% in additional tariffs on China.

The US' tariff rate against China currently stands at 104%, effective today, and Trump has pledged a new 125% rate.

"The US escalation of tariffs … seriously infringes upon China’s legitimate rights and interests and gravely undermines the rules‑based multilateral trading system," said the Chinese State Council’s Customs Tariff Commission, according to the state-run Global Times.

Global inflation expectations have edged upward due to the impact of US tariff policies, according to a report released Wednesday by Germany’s Ifo Institute.

An institute survey of nearly 1,500 economic experts from 131 countries showed that the annual inflation rate worldwide will reach 4% this year, then 3.9% in 2026, and 3.8% in 2028.

The Bank of England also warned Wednesday that US tariffs could weaken global economic growth and increase upside risks to inflation.

The pan-European Stoxx 600 fell 3.51%, or 17.07 points, to 469.84.

Britain’s FTSE 100 lost 2.92% – 231.05 points – to close at 7,679.48, while Germany's DAX 40 index fell 3%, or 609.38 points, to 19,670.88.

France's CAC 40 also was off 3.34%, or 237.4 points, to 6,863.02, and Italy's FTSE MIB 30 index dove 2.75% to 32,730.57 in a 926.48-point dip.