European stocks continued their sharp decline on Friday, with banking shares among the hardest hit, after China announced it would impose a 34% tariff on all U.S. goods starting April 10 in retaliation for the U.S.'s sweeping tariffs.
European stock sell-off deepens on Friday
The escalation in trade tensions sent shockwaves through global markets, triggering a widespread risk-off sentiment. The STOXX 50 dropped 5% to 4,840 points, its lowest level since early December, while the broader STOXX 600 tumbled 4.9% to 497, marking its weakest close since August. Both indexes were on track for significant weekly losses, with investors bracing for what could be the steepest sell-off since March 2022.
The fallout was especially pronounced in the financial sector, as concerns mounted over potential disruptions to global capital flows and a slowdown in cross-border investment. Germany’s Deutsche Bank and Commerzbank saw steep losses of 10.7% and 6.1%, respectively, while France’s Societe Generale plunged 11.6% and BNP Paribas slid 8%. Spanish lenders were also hit hard, with Santander, Bankinter, Caixabank, and Sabadell all registering losses between 9% and 13%, reflecting broader concerns about exposure to international markets and weakening economic confidence.
EU thinks of countermeasures
In response to the mounting crisis, the European Commission said it is actively preparing countermeasures aimed at protecting EU industries and maintaining trade balance. French President Emmanuel Macron went a step further, urging European companies to suspend planned investments in the United States, framing it as a necessary show of economic solidarity. Analysts warn that if the tit-for-tat tariffs continue to escalate, the eurozone economy—already grappling with sluggish growth—could face renewed recessionary pressures. Markets are now looking to next week’s emergency EU finance ministers meeting for potential policy interventions.
