European stocks finish higher as Trump's tariffs take effect at lower than expected 10%

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This photograph shows European countries’ flags waving in front of the European Parliament building in Strasbourg, eastern France, on June 6, 2024. (Photo by SEBASTIEN BOZON / AFP) (Photo by SEBASTIEN BOZON/AFP via Getty Images)

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LONDON — European stocks closed higher on Tuesday as investors assessed the new global trading landscape after U.S. President Donald Trump’s latest tariff move.

The pan-European Stoxx 600 finished the session 0.3% higher, reversing earlier losses, with regional bourses mixed.

Autos, one of the sectors most sensitive to tariffs and export policies, led the way, ending Tuesday’s trading almost 2% higher.

Regional stocks had finished Monday’s session lower as global markets reacted to Trump’s threat to introduce a new, blanket 15% global levy on imports to the U.S. with immediate effect. The president had initially announced plans to impose a 10% duty on global imports, before hiking that rate “to the fully allowed, and legally tested, 15% level.”

However, when the levy came into effect on Tuesday, it was at a rate of 10%. A memo from U.S. Customs and Border Protection, published Monday evening, said Temporary Section 122 Duties would see “an additional 10% ad valorem duty on imported articles of every country for a period of 150 days, unless specifically exempt.”

It is unclear whether the tariffs will apply to the U.K., which was the first country to reach a trade agreement with Washington last year after Trump unveiled his so-called reciprocal tariffs regime in full.

Britain secured a 10% tariff rate under the deal — the lowest granted by the White House to any individual trading partner — giving it more to lose than some other U.S. trading partners should the looming 15% levy be applied to its goods.

“I recognize the uncertainty the latest announcement from the U.S. has created, but I am laser-focused on protecting businesses and the British public in the national interest and all options are on the table,” U.K. Business and Trade Secretary Peter Kyle said in a statement on Monday.

“That’s why I spoke with my U.S. counterpart Jamieson Greer yesterday to raise my concerns about further uncertainty for businesses here and the need to honour our existing deal.”

European officials expressed concern over Trump’s new tariffs, signaling that it could pose a threat to its trade deals with the U.S. Later, the European Parliament announced Monday that it has paused work on ratifying the U.S.-EU trade deal agreed last summer.

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U.S. stocks rose Tuesday having tumbled during the previous session, with software stocks rebounding from persistent fears around AI disruption, as investors grappled with the new trade policy.

Trump continued to assert his ability to increase tariffs on Monday, warning of higher duties for countries that want to “play games” after the Supreme Court struck down his “reciprocal” tariffs last week.

Trump said over the weekend that the new 15% duty would go into effect immediately, though it was unclear whether any official documents had been signed outlining the timing. He also said that additional levies would be coming in the next few months.

In corporate news, British lender Standard Chartered published its full-year earnings on Tuesday, and although pre-tax profit jumped 16% year-on-year, it came in at a weaker-than-expected $6.96 billion. Net interest income rose 1% from the previous year to $11.2 billion, beating a consensus estimate compiled by LSEG.

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The bank said that in 2026, it expects reported operating income to be at the bottom end of its 5% to 7% growth forecast. In 2025, operating income jumped 6% year-on-year to $20.9 billion, in line with estimates.

Shares ended 1.5% lower.

— CNBC’s Sean Conlon and Sarah Min contributed to this market report.