European Stocks Drop as US Sets 39% Tariff Rate on Switzerland
European stocks declined on renewed trade jitters as President Donald Trump announced new tariff rates, including a 39% levy on imports from Switzerland.
The Stoxx Europe 600 Index dropped 0.9% by 8:17 a.m. in London. Switzerland’s SMI Index underperformed the European benchmark so far this year, rising only 2% compared to 6.6% for the region. The Swiss market is closed Friday for a holiday.
European big pharma stocks dropped after US President Donald Trump demanded drug companies lower US prices. Novo Nordisk A/S, Sanofi SA, GSK Plc, AstraZeneca Plc fell.
Switzerland now has one of the steepest levies globally. The average US tariff rate will rise to 15.2% if duties are implemented as announced, according to Bloomberg Economics. This is up from 13.3% earlier and significantly higher than the 2.3% in 2024 before Trump took office.
“The first quarter enthusiasm for European stocks has fizzled out, it now looks like it was just an anomaly, clearly the US markets have taken back the upper hand,” said Vincent Juvyns, chief investment strategist at ING Belgium SA. “European companies generate a quarter of their earnings in the US so higher tariffs will inevitably hurt them in the coming quarters”.
The main European index has gained 6.6% so far this year and is likely to face challenges in the coming weeks as the August-September period tends to be the worst for the benchmark.
Among other individual moves, Daimler Truck Holding AG fell 7.3% after it lowered its outlook for the year, pointing to weaker sales in North America where tariff-related uncertainty is causing buyers to postpone orders for new trucks.
Source: Bloomberg
