On Friday, stocks in Europe built on losses in the United States and Asia, after US President Donald Trump fanned fears of a full-blown trade war with major trading partners, including the EU, Canada and China.

The Stoxx Euro 600 Index dropped for a fourth day, with Germany's DAX gauge falling to a six-month low as carmakers slumped. The German blue-chip index was under more pressure than its peers as the country is home to a range of major exporters heavily exposed to any escalation in the tariffs war.

The sell-off came after Trump promised Thursday to impose substantial tariffs of 25 percent on steel and 10 percent on aluminum imports to the US next week. This prompted warnings that he was risking retaliatory measures. European Commission President Jean-Claude Juncker, for example, said Europe will respond "firmly" to any new tariffs.

But the US president seemed unperturbed by the reactions, suggesting in a message on Twitter that the US was ready to launch a trade war. "When a country (USA) is losing billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win," he tweeted Friday.

Sell-off in auto and steel

On Friday, investors were selling off shares in steel and aluminum manufacturers and exporters. Europe's sector-wide Stoxx industrial metals index fell 1.4 percent.

"Understandably equity markets have sold off on this, with steel input costs set to rise and the prospect of trade retaliation in the agriculture and airline sectors," said Chris Turner, a strategist at ING.

In Germany, the country's largest steelmaker, ThyssenKrupp, was down 1.7 percent. Car exporters joined the list of the biggest fallers. Volkswagen made the biggest single decline on the index, down 2.2 percent. Daimler was down 1.4 percent.

Automakers in Asia also felt the brunt of the proposed measures with Toyota down 1.4 percent. The company spoke out against the tariffs, saying its US plants source steel and aluminum from within the country. Toyota said tariffs would adversely affect automakers and result in higher costs for consumers.

Shares for Asian steel and aluminum manufacturers tumbled, with Japan Steel Works shedding 3.4 percent, Kobe Steel slipping 2.7 percent and JFE Holdings falling 2.8 percent.

As Trump's moves are ostensibly aimed at China, steelmaker China's Baoshan Iron and Steel tumbled 3.9 percent and Yunnan Aluminium fell 1.3 percent following the tariffs announcement. In South Korea, steel manufacturer Posco fell 3.6 percent and Hyundai Steel dropped 3 percent while the benchmark Kospi index ended the week at a two-week low, down 1 percent.

The aluminum tariff will be most keenly felt in Canada, which supplies about 2.5 million tons of the metal to the US each year. Rio Tinto, the biggest supplier of aluminum to the US from its smelters in Canada, said it would continue to "engage" with the Trump administration over the tariffs. "Aluminum from Canada has long been a reliable and secure input for US manufacturers — including the defense sector," the company said.

uhe/aos (Reuters, dpa, AFP)