European Stocks Plunge Sharply Amid Escalating U.S. Tariff Threats

European stocks experienced a steep downturn at the close of Monday's trading session, pulling back from record levels reached last week. The decline followed U.S. President Donald Trump's intensified trade rhetoric, in which he threatened to impose tariffs on leading European economies. The Euro Stoxx 50 index dropped by 1.7% to 5,922 points, while the broader Stoxx 600 index fell 1.2% to 607 points, amid broad-based selling across most sectors.

The main pressure stemmed from Trump's announcement of plans to impose a 10% tariff by the end of the month on countries including Germany, the UK, France, Sweden, Norway, the Netherlands, Finland, and Denmark, should they continue to oppose the sale of Greenland to the United States. Trump also warned that tariffs could be raised to 25% by June. In response, European sources revealed discussions within the EU to impose counter-tariffs on U.S. imports worth up to €93 billion.

In terms of individual stocks, the luxury goods and automotive sectors suffered the most significant losses due to their substantial exposure to the U.S. market. Shares of LVMH, Adidas, and Hermès fell between 5% and 3.5%, while BMW and Volkswagen dropped by approximately 4% and 3%, respectively. Conversely, defense companies such as Rheinmetall, Dassault, Saab, and Leonardo recorded notable gains ranging from 1.5% to 4%, benefiting from heightened geopolitical concerns.