European stocks followed Asian markets lower on Monday, on fears that worsening trade disputes between the United States and other countries, as well as political uncertainty in Germany, could hurt global economic growth.
Shares in London and Paris dropped nearly 1 percent, after stocks in China, Japan and South Korea dropped more than 2 percent. The euro was weaker against the American dollar. Yields on French, German and Italian 10-year bonds — which move inversely to their price — were higher, indicating investors viewed debt from those countries as riskier.
Investors appeared to be grappling with the continued worsening of global trade ties. The Trump administration has so far imposed tariffs, or threatened to do so, on longtime allies like Canada, Mexico and the European Union, as well as China, a country the president has frequently accused of using unfair trade practices.
The latest feint came on Sunday, when Canada retaliated against United States tariffs on steel and aluminum, imposing its own penalties on $12.6 billion of American products. Some investors worry risks to international trade and economic growth could escalate if the White House continues its protectionist push.
Investors also watched warily for signs of instability in Europe, as a rebellion against Germany’s chancellor, Angela Merkel, escalated over the weekend. Ms. Merkel, seen as among the most stable leaders in European politics as recently as a year ago, has been badly damaged in recent weeks by a mutiny from within her conservative alliance.
