European stocks closed firmly lower on Friday as trade tensions with the United States persisted. The Eurozone’s STOXX 50 closed 1% lower at 5,291 and the pan-European STOXX 600 fell 0.5% to close at 541. The EU Commission stated that they are approaching a framework for a trade agreement with the US to avoid the reintroduction of aggressive tariffs by the July 9th deadline.
This coincided with statements by US officials noting that the deadline will not be extended, and unilateral tariffs of up to 70% could be set on economies without a trade deal. In turn, ECB officials noted that they could undershoot the 2% inflation target if the euro stays as strong as $1.20 for an prolonged period. On the data front, producer prices in the bloc fell by 0.6% from the previous month in May. Banks, tech, and industrial giants led the losse with BBVA, Siemens, and ASML dropping around 2.5%. In the meantime LVMH fell 1.8% after China announced it will tariff brandy from the EU.
