The threat of an all-out trade war between the U.S. and the E.U. has put European auto stocks in reverse throughout 2025. At the close of business on Tuesday, the Stoxx Europe 600 Autos index XX:SXAP was still down more than 5% for the year compared to the overall Stoxx Europe 600 XX:SXXP benchmark’s 7% return.

European shares climbed on Wednesday, buoyed by hopes of a trade agreement between the European Union and United States after Japan struck a deal that lowers tariffs on its autos, sending Japanese stocks to a one-year high.