German Chancellor Olaf Scholz said that Europe has the capacity to react to new US tariffs if President Donald Trump follows through on his recent threats, joining a chorus of European leaders pledging to retaliate if necessary.

EU leaders meeting in Brussels Monday warned there would be no winners in a trade war with the United States, insisting they would hit back if President Donald Trump imposes tariffs. Trump has not hidden his enmity for the EU,

While EU leaders were trying to remind the Trump administration about the economic value of EU-US trade, they now widely agree that the correct answer to tariffs should be to retaliate with the same measures if necessary.

European shares slid on Monday, joining a worldwide selloff sparked by fears that U.S. President Donald Trump's tariffs on Canada, Mexico and China mark an opening salvo in a global trade war that would curb economic growth internationally.

The German and French stock markets were down about 2%, with shares in carmakers among the worst hit, while London's FTSE 100 dropped more 1%. The US dollar also strengthened on the currency markets,

Stock markets in Asia and Europe slumped Monday after Donald Trump slapped tariffs on Canada, Mexico and China, sparking fears over another bruising ‘America First’ trade war that could hit global economic growth.