Europe open: Stoxx tumbles on US tariff war, Ukraine tensions

(Sharecast News) - European markets opened sharply lower on Tuesday as the US went ahead with tariffs on China and Mexico, which in turn retaliated with levies of their own, while President Donald Trump ratcheted up geopolitical tensions by suspending all aid to Ukraine. The Stoxx 600 index was down by almost 1% in early deals, following slumps on wall Street and Asia driven by worries about the economic impact of a trade war.

Trump imposed his tariffs overnight and then cut off assistance to Ukraine, continuing his strong-arm tactics against the war-ravaged nation in an effort to force it to sign a deal on minerals and extract a peace deal on Washington and Moscow's terms.

Auto stocks were hammered as Trump waged a war of his own on trading partners. Canada and Mexico - America's biggest trading partners - will be slapped with tariffs of 25%, while levies against China will be doubled to 20%.

China announced Tuesday it will impose additional tariffs of up to 15% from March 10 on imports of key U.S. farm products, including chicken, pork, soy and beef, and also expanded controls on doing business with US firms.

Canadian Prime Minister Justin Trudeau responded with an immediate 25% tariff on CAN $30bn worth of US imports. He had warned previously that American beer, wine, bourbon, home appliances and Florida orange juice would be targeted.

Tariffs will be placed on another CAN $125bn of US goods if US levies were still in place in 21 days.

Shares in auto makers and industry suppliers were all hit by the news, with Stellantis, Mercedes Benz, Continental, Valeo, Daimler Truck and BMW lower.

Meanwhile, weapons manufacturers were in vogue on the prospect of higher defence spending by European nations. French defence firm Thales was also boosted by higher earnings and revenue last year.

Germany peers Rheinmetall, Hensoldt and Renk gained, while Britain's BAE Systems was also higher.

Reporting by Frank Prenesti for Sharecast.com