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(Sharecast News) - European stocks pared losses as investors digested China's retaliatory moves against US tariffs and the 30-day pause on levies against Canada and Mexico.
The pan-regional Stoxx was initially called to be higher but instead slipped 0.03% to 534. Germany's DAX was up 0.13% France's CAC-40 rallied to be 0.27% higher at midday.
Markets fell sharply on Monday as the Trump's tariff rampage spooked investors, with the decision to impose trade tariffs on Canada, Mexico and China exacerbated by a threat to extend to the policy to the European Union and UK.
However, jitters seemed to have eased when Trump announced a 30-day pause on his plans for Mexico and then Canada after both countries agreed to take steps toward preventing the trafficking of the opioid fentanyl into the US.
China, however, retaliated with tariffs of its own, with a 10% levy on American crude oil, agricultural machinery, large-displacement cars and pickup trucks. There will also be 15% tariffs on coal and liquefied natural gas, as well as an investigation into Google.
"European equities are on the back foot despite the temporary resolutions made between the US and their neighbours on both North and South borders. The decision to target discussions and tariffs around fentanyl may have been a red herring, allowing the president to enact tariffs shaped as a national health emergency," said MarketScope analyst Joshua Mahony.
"For now, the one-month agreements with Mexico and Canada does help alleviate fears that Trump will spark a global reshuffle that sparks higher inflation, while driving growth lower. Nonetheless, the focus now turns to China, with markets watching closely for any news of a one-to-one discussion between Trump and Xi Jinping in the coming days."
In equity news, Bavarian Nordic slumped after annual results published on Monday.
Infineon Technologies surged after the German chipmaker's first-quarter revenue beat analyst estimates, while compatriot manufacturer Kion soared on strong 2024 results.
Vodafone fell after the fall in German sales worsened in the third quarter, despite better regional performances in Turkey, Africa and the UK.
Reporting by Frank Prenesti for Sharecast.com
