European stock markets started Friday’s trading session in the red across the board, with the regional Stoxx 600 index declining as investors reacted to news of China imposing high duties on European Union brandy.
This development, coupled with ongoing uncertainty surrounding US tariff deadlines, has cast a shadow over markets, with French luxury and drinks companies taking an early hit.
A red start to Friday: China’s brandy duties spook markets
At the open, the pan-European Stoxx 600 index was down 0.4%.
The negative sentiment was widespread, with the UK’s FTSE 100 down 0.32%, Germany’s DAX down 0.29%, and France’s CAC 40 leading the losses with a decline of 0.72%.
This downturn follows a higher close on Thursday, when global equities were initially boosted by a much stronger-than-expected US jobs report.
The primary catalyst for Friday’s weakness is a final ruling from China’s commerce ministry on its investigation into European Union brandy.
According to a ministry release (via Google translation), the investigation concluded that the bloc has engaged in the dumping of the spirit.
Reuters reported that a tariff rate on EU brandy will now be set at up to 34.9% for a period of five years, starting from July 5.
This news had an immediate impact on French drinks sellers.
Shares of Pernod Ricard were down 3.3%, Remy Cointreau fell 4.5%, and luxury conglomerate LVMH, which also has a significant spirits business, saw its stock drop 2.1%.
The tariff clock is ticking: US deadlines and trade talk jitters
Adding to the cautious mood, investors are acutely aware that US President Donald Trump’s July 9 deadline for tariff negotiations is fast approaching.
This deadline could see duties on key trading partners, including the European Union, spike unless a comprehensive trade deal is reached.
President Trump has stated that the US will begin sending letters to countries setting out their specific tariff rates on exports to the US, with 10 to 12 nations expected to receive theirs today.
US Treasury Secretary Scott Bessent told Bloomberg that he expects around 100 countries will face a 10% levy, which serves as the baseline for the so-called ‘reciprocal’ tariffs.
The EU, meanwhile, has said it is closing in on a “framework” trade deal with the US, but has also acknowledged that a full agreement will be impossible to reach by the July 9 deadline, leaving the final outcome uncertain.
While Wall Street is officially on a break for the 4th of July holiday today, investors will undoubtedly be keeping a close eye on their phones for any updates on these trade developments, as well as the fallout from President Trump’s flagship megabill, which recently passed in Congress and promises a host of changes to taxes, social spending, and energy policy.
Corporate moves: Air France-KLM to take majority control of SAS
In the corporate arena, airline group Air France-KLM announced that it is initiating proceedings to acquire a majority stake in the Scandinavian airline SAS.
The move will see Air France-KLM increase its holdings in the company to 60.5%, up from its current position of just under 20%.
The airline group hopes to close the deal in the second half of next year.
The move is seen as a stabilizing force for the Scandinavian carrier.
“The move brings not just stability but will also allow for deeper industrial integration,” SAS CEO Anko van der Werff said in a statement, signaling a new chapter for the airline under majority ownership by the Franco-Dutch group.
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