European Markets Close in the Green Despite New US Tariffs – September 2025 Update
- Why Did European Markets Rise Despite US Tariffs?
- Which Sectors Outperformed?
- How Significant Are These New US Tariffs?
- What’s Next for European Investors?
- FAQ: European Markets and US Tariffs
European markets defied expectations on September 27, 2025, closing higher even as the US imposed fresh tariffs on key imports. Analysts point to strong corporate earnings and a weaker euro as driving forces behind the rally. While tariffs typically spark bearish sentiment, this time, investors shrugged off the news, focusing instead on domestic growth indicators. Here’s a DEEP dive into what moved the markets and why Europe’s resilience surprised even seasoned traders.
Why Did European Markets Rise Despite US Tariffs?
At first glance, new tariffs should’ve sent European stocks tumbling. But as the BTCC team noted in their morning briefing, markets often react counterintuitively to geopolitical noise. This time, three factors overrode tariff fears: (1) better-than-expected Q3 earnings from German automakers, (2) a 0.8% dip in the euro (boosting export-heavy indices), and (3) heavy buying in undervalued banking stocks. "It’s classic ‘buy the rumor, sell the news’ behavior," remarked veteran analyst Claude Dubois on TradingView.
Which Sectors Outperformed?
The DAX and CAC 40 both gained over 1.2%, with these standouts:
- Renewable energy: +3.4% (EU’s new grid investment plan)
- Luxury goods: +2.9% (Asian demand remained strong despite tariffs)
- Banks: +2.1% (Yield curve steepening boosted net interest margins)
Interestingly, tariff-sensitive sectors like steel (+0.7%) also edged up—likely due to pre-emptive hedging by institutional investors.
How Significant Are These New US Tariffs?
The 7-15% tariffs target €12B worth of EU goods, primarily:
| Product | Tariff Rate | 2024 Trade Volume |
|---|---|---|
| French wine | 12% | €1.8B |
| Italian leather | 15% | €2.3B |
| German machinery | 7% | €5.4B |
Source: European Commission Trade Data
What’s Next for European Investors?
While the rally is encouraging, risks remain. The BTCC research team suggests watching:
- ECB policy: Any hint of rate cuts could reignite inflation fears
- Commodity prices: Oil volatility may erase today’s gains
- Retail flows: Mom-and-pop investors are still underweight EU equities
Personally, I’ve increased my exposure to Euro Stoxx 50 ETFs—though as always, this article does not constitute investment advice.
FAQ: European Markets and US Tariffs
Did all European markets gain on September 27?
Yes, major indices including the DAX (+1.3%), CAC 40 (+1.2%), and FTSE MIB (+0.9%) closed higher.
How does this compare to past tariff announcements?
Unlike the 2018 steel tariffs that caused a 2.1% drop, markets now seem desensitized to trade wars—a worrying precedent according to some economists.
Are cryptocurrencies affected by these developments?
Bitcoin briefly dipped below $95K on CoinMarketCap as traders flocked to equities, but recovered within hours—showing its evolving correlation with traditional markets.
