European shares stumble on Trump's new tariff threat

European shares began June on a dour note as markets grappled with U.S. President Donald Trump's new tariff plans that threatened to reignite a fresh wave of global trade tensions.

The continent-wide STOXX 600  slipped 0.1% on Monday, after recording about a 4% gain in May.

Late on Friday, Trump said he planned to increase tariffs on imported steel and aluminium to 50% from 25%, to which the European Union said it was prepared to retaliate.

Steel companies as ArcelorMittal and Aperam pared some losses and closed marginally lower.

The automobile sector , however, bore the brunt of the trade jitters, falling 2.1%, the most among sectors.

Milan-listed Stellantis  down 5%. Mercedes-Benz , BMW and Volkswagen fell between 1.9% and 2.7%.

Even Luxury stocks, reliant on global exports dropped, with the broader gauge  was down 0.8%.

An index measuring volatility in the market  climbed 4.3% - at a one-week high.

"The market was definitely in what we would call risk off mode," said Steve Sosnick, chief market analyst at Interactive Brokers.