[Christian Harris]

European stocks took a sharp hit on Tuesday as escalating US-Canada trade tensions sent shockwaves through global markets.

The pan-European Stoxx 600 index dropped 1.7%, with Stellantis leading the decline, plummeting 5% after President Trump threatened to impose higher tariffs on auto imports.

The travel and healthcare sectors also saw significant losses, reflecting broader investor unease.

Adding to the market’s woes, Volkswagen reported a 15% drop in annual operating profit, citing rising costs and restructuring expenses.

The automaker’s struggles highlight the broader challenges facing industries caught in the crossfire of global trade disputes.

Investors are now bracing for further volatility as Trump’s 25% tariffs on steel and aluminium imports take effect, prompting the European Union to retaliate with $28.3 billion in counter-tariffs set to roll out in April.

The EU’s move underscores the growing tit-for-tat nature of global trade tensions, which could weigh heavily on industries reliant on these materials.

Meanwhile, Australia labelled Trump’s tariffs “unjustified” but opted not to impose reciprocal duties, citing concerns over higher consumer prices.

Prime Minister Anthony Albanese emphasised that retaliatory tariffs would ultimately harm Australian consumers, highlighting the delicate balance governments must strike in navigating trade conflicts.

The ongoing trade uncertainties are likely to keep markets on edge, with investors closely monitoring how these tensions evolve and their potential impact on global economic growth.

The ripple effects of these tariffs could extend far beyond the immediate sectors involved, influencing everything from supply chains to inflation rates.

What’s your take on how this trade war might play out in the coming months? 📉🌍

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