European stocks fell at the close of trading on Friday, wiping out their weekly gains after slipping in the final moments of the session amid renewed fears of a trade war sparked by new threats from US President Donald Trump to impose a significant increase in tariffs on Chinese imports, raising investor concerns and bringing markets back to a state of caution.

The pan-European Stoxx 600 index closed down 1.2%, marking its worst daily performance in over a month, with all major European exchanges falling more than 1%, except for the UK’s Financial Times index and Spain’s Ibex.

Tariffs

Steve Sosnick, chief market analyst at Interactive Brokers, said the president’s comments do not seem helpful to the market, adding that markets had finally moved past the worst tariff fears but are now facing a new round, as the tone of his speech was certainly sharp.

The European automotive sector led the losers, dropping about 9% during the week, becoming the worst performing sector, affected by sharp declines in Ferrari and BMW shares, while utility stocks were the best performers during the week.