European automakers dropped 1.9% to a more-than-three-month low, with shares of Mercedes-Benz BMW and Volkswagen dropping in the range of 1.1% and 2.3%
European stocks slid on Wednesday on a selloff in automakers after a report about possible Chinese tariffs on imported cars and a stronger-than-expected UK inflation data further dampening the mood.
European automakers dropped 1.9% to a more-than-three-month low, with shares of Mercedes-Benz BMW and Volkswagen dropping in the range of 1.1% and 2.3%.
China should raise its import tariffs on large gasoline-powered cars to 25%, a government-affiliated auto research body expert told China’s Global Times newspaper as the country faces sharply higher U.S. auto import duties and possibly additional duties to enter the European Union.
The deadline is approaching for the European Union to announce the conclusions of its investigation into Chinese EV subsidies, and this move by China is clearly a warning shot that if the European Union takes action then it can expect a similar response from China on EU car exports, according to Stuart Cole, chief macro economist at Equiti Capital.
The European Commission launched an investigation in October into whether fully-electric cars manufactured in China were receiving distortive subsidies and warranted extra tariffs. The European Union could impose provisional duties in July.
The STOXX 600 index slipped 0.3%, with Britain’s FTSE 100 leading losses in the region after data showed UK inflation dropped by a less-than-expected 2.3% in April, prompting traders to cut their bets on a BoE interest rate cut next month.
Investors are awaiting minutes from the U.S. Fed’s last policy meeting as well as Nvidia’s quarterly earnings later in the day to determine if the recent rally in markets could continue.
The European Central Bank (ECB) should not necessarily follow up a rate cut in June with another move the following month, even if inflation is on its way to target, Bundesbank President Joachim Nagel said in a newspaper interview published on Tuesday.
