European markets sink after fresh Trump tariff threat; Volkswagen down 7%

In a statement on Monday, German auto giant BMW reacted to new U.S. tariffs on Mexico, Canada and China, and a threat from U.S. President Donald Trump that levies on EU goods will be imposed “pretty soon.”

“Free trade, which has always been a guiding principle for the BMW Group, is of immense importance worldwide: It is one of the most crucial drivers of growth and progress,” a spokesperson for BMW said via email.

“Tariffs, on the other hand, hinder free trade, slow down innovation, and set a negative spiral in motion. In the end, they are detrimental to customers, making products more expensive and less innovative.”

Separately, Volkswagen told CNBC it was monitoring the situation “closely.”

“[We] are assessing any potential effects on the automotive industry and our company as a result of the announced tariffs in the U.S., Canada, and Mexico,” a spokesperson said in emailed comments.

“At the same time, we continue to promote open markets and stable trade relations. These are essential for a competitive economy and for the automotive industry in particular. We are counting on constructive talks between the trading partners to ensure planning security and economic stability and to avoid a trade conflict.”

Shares of BMW were down 4% at 9:09 a.m. London time. Volkswagen shares were 5% lower.

— Chloe Taylor

Shares of auto giants fell sharply on Monday, after U.S. President Donald Trump imposed long-threatened tariffs on goods from Canada, Mexico and China, sparking concerns about the prospect of a global trade war.

He has suggested the European Union could be next to face tariffs.

In Europe, shares of French car parts supplier Valeo and automaker Renault fell 8.3% and 4%, respectively, during early morning deals. Meanwhile, Germany’s BMW, Volkswagen and Porsche were all seen trading off by around 5%.

— Sam Meredith

The euro was down 1.24% against the dollar at 7:47 a.m. London time, trading at $1.0233.

President Donald Trump told the BBC over the weekend that U.S. tariffs on EU goods “will definitely happen.” A European Commission spokesperson said the EU will “respond firmly.”

— Chloe Taylor

Swiss wealth manager Julius Baer on Monday reported full-year net profit of 1.02 billion Swiss francs ($1.12 billion) — a year-on-year increase of 125%.  

A year earlier, the bank reported a net profit of 454 million Swiss francs. Its exposure to real estate group Signa Holding led to a net credit loss of 606 million Swiss francs in 2023, which led to the resignation of then-CEO Philipp Rickenbacher.

The company said on Monday that its assets under management hit a record high last year, rising 16% year on year to 497 billion Swiss francs. It attributed the rise to new net money, rising stock markets and a weaker Swiss franc.

Earnings per share came in at 4.98 Swiss francs.

— Chloe Taylor

Traders appeared to search for safety in early Sunday night trading after the U.S. hit key trade partners with hefty tariffs on goods.

Bitcoin dipped back below $100,000, losing 3.6% to trade at $97,554.24. Gold, a traditional safe-haven asset, ticked 0.3% higher to $2,842.60 per ounce.

— Fred Imbert

The U.S. on Saturday imposed levies on imports from Canada, Mexico and China. Here’s how those countries, and the European Union, reacted:

• Canada: Prime Minister Justin Trudeau slapped retaliatory tariffs of 25% on $155 billion worth of U.S. goods. “Like the American tariffs, our response will also be far-reaching and include everyday items such as American beer, wine and bourbon, fruits and fruit juices, including orange juice, along with vegetables, perfume, clothing and shoes,” Prime Minister Justin Trudeau said.
• Mexico: President Claudia Sheinbaum slammed the new levies, saying she instructed the country’s secretary of the economy to “implement the Plan B we have been working on, which includes tariff and non-tariff measures in defense of Mexico’s interests.”
• China: The country said it would file a lawsuit with the World Trade Organization. “The U.S.’s unilateral tariff hike seriously violates WTO rules, does nothing to resolve its own issues, and disrupts normal economic and trade cooperation between China and the U.S.,” the Chinese Ministry of Commerce said in a statement Sunday, according to an NBC translation.
• The European Union: A spokesperson for the EU said the bloc would “respond firmly” if President Donald Trump imposed tariffs on the region. “Across-the-board tariff measures raise business costs, harm workers and consumers. Tariffs create unnecessary economic disruption and drive inflation. They are hurtful to all sides,” the spokesperson said.

— Katrina Bishop

— Fred Imbert

The U.S. dollar advanced nearly 1% on Sunday night, continuing gains since President Donald Trump implemented tariffs over the weekend. The currency is trading near five-year highs.

— Pia Singh

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.

Earnings come from Julius Baer on Monday, while data releases include the latest euro zone inflation data.

— Holly Ellyatt