Trade tensions between the United States and China intensify, G7 at the center of concerns

European stocks fell on Monday, as investors reacted to the latest escalation of the US-China trade war.

The pan-European Stoxx 600 yielded around 0.4% over the morning chords, with the sectors and major stock markets being broadly in the red. European core resource stocks, heavily exposed to China, fell 0.3%.

British markets are closed due to a holiday.

China had announced plans to impose additional tariffs on $ 75 billion worth of US goods. President Donald Trump then ordered US companies to find an "alternative" to China.

Trump said his government would increase existing tariffs on Chinese products by $ 250 billion, up from 25 percent on Oct. 1, compared with 30 percent on the remaining 30 percent. instead of 10%.

Merchants also closely monitored the Group of Seven (G-7) summit in Biarritz, France. The break in trade between the two largest economies in the world has darkened the meeting of world leaders, Trump claiming that he "could declare a national emergency" on the issue.

France is also planning to hit tech giants – including Facebook, Amazon and Google – with a "digital tax" of 3%, which provoked Trump's ire. The American leader has threatened to tax French wine in response; The President of the European Council, Donald Tusk, said this weekend that Brussels "would react in the same way" if Washington imposed on France customs duties higher than the tax.

In terms of data, investors will monitor the German business climate of the Ifo Institute in Munich. It is feared that Germany is heading for a recession after the Gross Domestic Product (GDP) contracted by 0.1% in the second quarter. A recession is typically marked by two consecutive months of contraction, as well as by the general decline in economic activity.

As for individual stocks, Deutsche Wohnen in Germany lost 3% as a result of reports detailing details of a rent ceiling in Berlin. IT consultancy Sopra Steria recorded another decline in equity trading, with a 2.6% drop in shares.