BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may drift lower on Monday as investors weigh the impact of U.S. President Donald Trump's latest tariff threats.
Trump on Saturday threatened to impose a 30 percent tariff on imports from Mexico and the European Union starting on Aug 1, even as they are locked in long negotiations.
Mexico slammed Trump's latest tariff threat as an 'unfair deal' but expressed confidence that a trade deal could be reached before the August deadline.
The European Union has announced a delay to its countermeasures against the U.S. until early August to allow more time to negotiate a deal.
Germany's finance minister has called for firm action if the levies went ahead. French President Emmanuel Macron has called on the bloc to 'resolutely defend European interests'.
'We remain ready to continue working towards an agreement by August 1. At the same time, we will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required,' President of the European Commission Ursula von der Leyen said.
Traders also look ahead to the start of earnings season, with the big U.S. banks due to report their quarterly results this week amid shifting interest-rate expectations.
JPMorgan Chase, Bank of America and Goldman Sachs are among the financial giants releasing their earnings results this week.
On the data front, U.S. inflation prints due this week may give investors a chance to gauge the impact of Trump's tariffs feeding through the prices.
The CPI print, due on Tuesday, is expected to show a 0.3 percent month-on-month gain, up from 0.1 percent in May.
Asian markets were mixed after the release of upbeat Chinese trade data. Customs data showed China's rare earths exports rose 32 percent in June from the month before in a sign of trade war relief.
The dollar maintained its recent gains and gold was little changed around $3,360 per ounce, while oil prices traded slightly higher, building on Friday's gains, fueled by anticipation of new U.S. sanctions on Russia.
U.S. stocks retreated from record highs on Friday after President Trump threatened a 35 percent tariff on Canadian imports effective August 1 and warned of a blanket tariff of 15-20 percent on most trading partners.
The Dow slipped 0.6 percent, the tech-heavy Nasdaq Composite eased 0.2 percent and the S&P 500 gave up 0.3 percent.
European stocks closed lower on Friday as renewed trade tensions rattled investor confidence. The pan European STOXX 600 declined 1 percent.
The German DAX fell 0.8 percent, France's CAC 40 lost 0.9 percent and the U.K.'s FTSE 100 shed 0.4 percent.
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