European stocks edge lower as automakers hit by US tariff threat

European stocks slipped in early trading Monday, dragged lower by automakers after US President Donald Trump threatened to raise tariffs on cars imported from the European Union.

The Euro Stoxx 50 index was down 0.08% at 0720GMT, while London markets were closed for a holiday.

Carmakers led losses after Trump said the EU had not fully complied with a trade agreement previously negotiated with Washington.

BMW fell 2.1%, Mercedes-Benz Group lost 1.9%, and Volkswagen declined 1.7%, weighing on the broader index.

The tariff threat, announced Friday, followed Trump's criticism that the EU had failed to fully implement commitments under the trade deal. The agreement had set a 15% tariff level for most EU exports, including cars and auto parts, while the bloc was expected to expand market access for US industrial goods and vehicles.

Technology shares moved higher, supported by continued investor demand for artificial intelligence-linked stocks, following record highs in US equities on Friday and gains across Asian markets.

European equities have lagged behind US and emerging market peers since the start of the Iran war on Feb. 28, as the conflict has weighed on consumer sentiment and pressured luxury groups such as LVMH and Hermes.

After a strong start to the year, European stocks have struggled to match gains in Asia and the US amid trade uncertainty, geopolitical risks, and weaker consumer-facing sector performance.