European shares fell on Monday, led by automobiles, as the U.S. President Donald Trump's latest threat to impose steep tariffs on the European Union and Mexico kept investors on edge.
The pan-European STOXX 600 index was down 0.6% at 544.3 points, as of 0706 GMT. Other regional indexes also declined, barring the UK's FTSE 100, which was up 0.2%.
Trump on Saturday threatened to impose a 30% tariff on imports from the EU and Mexico starting August 1, after weeks of negotiations with major U.S. trading partners failed to reach comprehensive trade deals.
In response, the EU said on Sunday it would extend its suspension of countermeasures to U.S. tariffs until early August and continue to press for a negotiated settlement.
Adding to the trade turmoil, on Monday, Italy's Foreign Minister Antonio Tajani said in a newspaper interview that the EU has already prepared a list of tariffs worth 21 billion euros ($24.5 billion) on U.S. goods if the two countries fail to reach a deal.
In the market, European automobile shares fell 1.4%, while retail sector was down 1%.
Among individual stocks, AstraZeneca rose 1.9% after the drugmaker said its drug Baxdrostat met all the main and secondary goals of a late-stage study in patients with uncontrolled or treatment-resistant hypertension.
(Reporting by Sanchayaita Roy and Sukriti Gupta in Bengaluru; Editing by Mrigank Dhaniwala)
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