Europe markets open lower after Trump says EU tariffs are coming ‘very soon’; Rolls-Royce up 15%

European markets opened lower Thursday after U.S. President Donald Trump on Wednesday threatened to impose 25% tariffs on imports from the European Union.

The Stoxx 600 index dropped 0.7% in early deals, with almost all sectors in the red and Germany’s DAX down 1.2%.

Shares of aerospace and defense firm Rolls Royce jumped more than 15% after the company upgraded its medium-term targets in its full-year results, recorded higher revenue and profit and reinstated shareholder dividends.

British building materials supplier Howden Joinery was among the worst performers, down 6.7% after narrowly missing full-year revenue expectations despite announcing a new £100 million ($126.7 million) share buyback.

At Trump’s first Cabinet meeting Wednesday, he said that duties against Canada and Mexico would take effect on April 2 and that his trade war will include a 25% tariff on goods from the EU.

“We’ll be announcing it very soon,” he told gathered reporters. “It’ll be 25% generally speaking and that will be on cars and all other things.”

“They’ve really taken advantage of us … They don’t accept our cars, they don’t accept, essentially, our farm products. They use all sorts of reasons why not. And we accept everything of them,” Trump said in his Cabinet meeting.

A European Commission spokesperson told CNBC: “As previously stated, the EU will react firmly and immediately against unjustified barriers to free and fair trade, including when tariffs are used to challenge legal and non-discriminatory policies.”

Investors are also monitoring another earnings bonanza on Thursday, with Daimler Truck, Swiss Re, AXA, Veolia, Metro Bank, WPP, Iberdrola, St. James’s Place, Taylor Wimpey, Man Group, LSEG, Aviva, Telefonica, Rolls-Royce Holdings, Teleperformance, Saint-Gobain and EDP all reporting.

Data releases will include the latest Spanish inflation rate, Italian business and consumer confidence data, and euro zone economic sentiment figures.