European Stocks Open Lower as Airbus Slumps on U.S. Tariff Woes

(Bloomberg) -- European equities fell slightly at the open and Airbus SE paced the declines after President Donald Trump’s administration threatened tariffs on some $11 billion of imports from the European Union in response to the trading bloc’s subsidies to the Boeing Co. rival.

The Stoxx Europe 600 Index fell as much as 0.2 percent. Airbus dropped 1.8 percent. Drugmaker Novartis AG retreated 2.2 percent after completing the spinoff of Alcon Inc. The FTSE 100 Index was down 0.2 percent as Prime Minister Theresa May heads to Berlin and Paris Tuesday as part of her efforts to win a short delay to Britain’s departure from the EU.

Trump’s administration is proposing tariffs in response to harm the U.S. says is being caused by the bloc’s subsidies to Airbus, but the threat would be implemented only after the World Trade Organization gives the final go-ahead this summer. European equities have enjoyed a robust rally this year, however outflows from the region’s funds have continued almost non-stop for a year now. Strategists are concerned about the first-quarter reporting season and geopolitical surprises, such as the outcome of Brexit negotiations and possible U.S. import duties.

“The upside seems limited at the moment as Brexit and the mixed European macro data weigh on sentiment, as seen by continuing outflows from European equity funds,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg in Frankfurt.

To contact the reporter on this story: Ksenia Galouchko in London at kgalouchko1@bloomberg.net

To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Jon Menon

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