European stocks close 3.5% lower as Trump tariffs take effect, China and EU retaliate

European stocks closed sharply lower on Wednesday, with Tuesday’s market rebound proving short-lived as the U.S.′ country-specific tariffs started taking effect.

The pan-European Stoxx 600 index ended the session down 3.5% at its lowest closing level since January 2024, with all sectors and major bourses firmly in negative territory. Regional health care and oil and gas indexes were among the biggest losers, plummeting 5.9% and 5%, respectively.

Europe’s major indexes extended their losses after China announced it is slapping retaliatory tariffs of 84% on U.S. imports from April 10, up from 34%, and the European Union approved an initial set of trade countermeasures in response to U.S. duties on steel and aluminum. The French CAC 40 fell by 3.34%, while Germany’s DAX was 3% lower, and the FTSE 100 lost 2.9%.

European markets had closed in the green on Tuesday, snapping a four-day loosing streak. The move higher came after Asia-Pacific stocks had kicked off a global equity rebound, which U.S. stocks also initially joined before pulling back.

Unease about the fallout from U.S. President Donald Trump’s tariffs and retaliatory measures from the U.S.′ trading partners weighed on markets as concerns about more duties being announced grew and uncertainty persisted.