European shares drop as Trump's fresh tariffs take effect
March 4 (Reuters) - European shares joined a global market selloff on Tuesday after U.S. tariffs on Canada, Mexico and China took effect, raising concerns that similar levies could be imposed on Europe.
The pan-European STOXX 600 index .STOXX was down 1%, as of 0811 GMT, retreating from previous session's record high.
Last week, U.S. President Donald Trump floated a 25% tariff on cars and other goods from the European Union.
Shares of automakers, which are vulnerable to trade duties, declined on Tuesday, with Stellantis STLAM.MI dropping 3.6%, BMW BMWG.DE losing 3% and Porsche PSHG_p.DE down 1.6%.
The sub-index of automobiles and components .SXAP shed 2.6%.
China-exposed luxury stocks Kering PRTP.PA, LVMH LVMH.PA and Hermes HRMS.PA fell between 1.7% and 2.3% after Trump doubled duties on Chinese goods to 20%.
China swiftly retaliated by announcing 10%-15% levies on certain U.S. imports from March 10, aggravating a trade war between the world's top two economies.
Oil and gas index .SXEP led the sectoral losses, falling 2.8%, as it tracked the downward trend in global crude prices. O/R
In contrast, the region-wide aerospace and defense index .SXPARO rose 0.8%, after Trump paused military aid to Ukraine, suggesting that European countries, including Germany, may need to increase their defense spending.
In other stocks, Thales TCFP.PA rose nearly 9% after the defence and technology group posted stronger-than-expected 2024 earnings, despite losses in its space division.
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