European stocks plummet 4%, banks slide 9% as China imposes retaliatory tariffs

European stock markets continued to tumble on Friday, with investors still reeling from the scale of U.S. tariffs announced this week.

The regional Stoxx 600 index was down 4.2% at 11:30 a.m. in London, with banks down almost 10% after Thursday’s 5.53% plunge. The sector is seen as vulnerable to a slowdown in growth or a recession, now viewed as a much stronger possibility both for the U.S. and the global economy. Bank of America strategists said Friday that banks were also “among the assets least advanced in pricing global macro trouble.”

China, which has been hit with a total tariff rate of 54% by the U.S., said Friday that it is retaliating with its own 34% tariff on all goods imported from the U.S. starting April 10.

Top posts

• El-Erian says U.S. recession risks are now ‘uncomfortably high’ | view post
• Why European banks are bleeding out in the wake of U.S. tariffs | view post
• BP chair Helge Lund to step down | view post

The Stoxx 600 closed 2.57% lower on Thursday, as the world digested the steep duties slapped by U.S. President Donald Trump on more than 180 countries, bringing fears of a global trade war and a U.S. recession to a boiling point.

Among the hardest-hit sectors on Thursday was retail, with the Stoxx Luxury 10 index down 5.2% in its worst session for nearly four years. Shares of shipping giants Maersk and Hapag-Lloyd, bellwethers for the health of the global economy, both fell more than 9%.

Economists are still scrambling to assess the scale of the fallout, which will depend on how long tariffs remain in their existing form and on how other nations retaliate.

The European Union on Thursday said it would prepare countermeasures against the U.S. if negotiations fail.

French President Emmanuel Macron urged French companies to pause planned investments in the U.S., and acting German economy minister Robert Habeck said Trump would “buckle under pressure” if Europe bands together in its response.

The EU was hit with tariffs of 20%, the U.K. of 10%, Norway of 15%, and Switzerland of 31%.

Economists at Goldman Sachs said in a Friday note that while the U.K.’s tariffs were lower than the others, they were nonetheless higher than expected, leading to a lower growth forecast for the British economy, down from 0.8% to 0.7% this year. The investment bank also trimmed its growth outlooks for Switzerland, Sweden and Norway.

The market impact was even more severe in the U.S. Thursday was the worst day since 2020 for each of the three major U.S. indexes, with the Dow and S&P 500 down around 4% and 4.8%, respectively, while the technology-heavy Nasdaq Composite was down nearly 6%.

Asia-Pacific markets retreated on Friday, with Japanese stocks among the worst performers.