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Shares in large European carmakers have fallen after Germany's Daimler warned of decrease earnings this yr due to US-China commerce tensions.
Daimler forsees decrease gross sales of Mercedes-Benz automobiles resulting from a tax on the import of US autos into China.
The United States is placing tariffs of at the least $50bn (£38bn) of Chinese imports. China stated it might retaliate with its personal tariffs from 6 July in return.
Daimler has large factories within the United States that export to China.
The Trump administration has threatened additional levies on as much as $400bn value of Chinese items if China continues to hit again.
In late morning trading in Frankfurt, Volkswagen was down 2.4%, whereas Daimler was greater than four% decrease. On the Paris market, Peugeot-Citroen was 1.3% down, whereas Renault had misplaced 1%.
Mercedes-Benz had report gross sales within the first three months of this yr, led by China, the place gross sales elevated by 17%.
But Daimler, the proprietor of Mercedes-Benz, stated this yr's earnings from car gross sales had been anticipated to be "slightly below the previous year".
"From today's perspective, the decisive factor is that, at Mercedes-Benz Cars, fewer than expected SUV sales and higher than expected costsnot completely passed on to the customersmust be assumed because of increased import tariffs for US vehicles into the Chinese market," the corporate stated.
"This effect cannot be fully compensated by the reallocation of vehicles to other markets."
Earlier this month, Daimler was pressured to recall autos in Germany discovered to be fitted with unlawful software program that masks diesel emissions.
Daimler stated the recall of diesel autos and declining demand in Latin America was additionally affecting general earnings.