European equity indices traded lower Wednesday, as investors anxiously awaited more clarity over the extent of the Trump administration’s tariff plans, which could be pivotal for the near-term outlook for global markets.
At 02:02 ET (07:02 GMT), the DAX index in Germany dropped 0.4%, the CAC 40 in France slipped 0.3%, and the FTSE 100 in the U.K. fell 0.3%.
Liberation Day looms
The White House confirmed on Tuesday that U.S. President Donald Trump will impose new tariffs later Wednesday, a day he has long labelled “Liberation Day”, with the duties set to take effect immediately.
However, there still remains uncertainty over the size and scope of trade barriers, aside from the already announced 25% tariff on auto imports, which will take effect on April 3.
A report from the Washington Post said Trump was considering imposing duties on roughly 20% of imports coming into the country, while CNBC reported that Treasury Secretary Scott Bessent told lawmakers that the U.S. president would impose the highest possible reciprocal tariffs on major trading partners.
Heightened uncertainty over the tariff news and the potential impact on global economic activity have weighed on sentiment, with the broad-based S&P 500 index entering correction territory, a drop of 10% from a recent high, on Wall Street in mid-March.
Europe set to reciprocate
Europe will respond to the likely implementation of the U.S. tariffs in a proportionate manner but will not escalate tensions, French industry minister Marc Ferracci said on Wednesday.
“Europe has always been on the side of negotiation and calming things down because trade wars, you know, only produce losers,” Ferracci told RMC radio.
The European Central Bank cut interest rates last month for the sixth time in nine months while noting a number of upcoming challenges as it tries to get inflation to its 2% target, including the potential of tariffs from the Trump administration.
Its next rate decision is due on April 17.
Italian banking consolidation
The Italian banking sector is in the spotlight Wednesday, after UniCredit (ETR: CRIG) said on Wednesday that Italy’s market watchdog Consob has approved the share offer document for its €14 billion all-share bid for smaller rival Banco BPM (BIT: BAMI), the last required step to launch the tender.
The offer will run between April 28 and June 23, Italy’s second-largest bank said in a statement.
UniCredit received approval last month from the European Central Bank to take a stake of just under 30% in Commerzbank (ETR: CBKG), although it is uncertain whether it will pursue a full takeover of the German lender.
Crude awaits tariffs, OPEC meeting
Oil prices slipped lower Wednesday in thin volumes ahead of the announcement of the extent of U.S. trade tariffs, which could hit global growth.
Markets were also awaiting a meeting of the Organization of Petroleum Exporting and Allies later this week, where the cartel is reportedly considering plans to further increase production.
