By Margaryta Kirakosian and Chiranjivi Chakraborty

(Bloomberg) -- European equities dropped, tracking Asian shares lower, as US President Donald Trump’s latest pronouncements on trade tariffs drained investor appetite for riskier assets.

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The Stoxx 600 index fell 0.6%, with mining and technology shares among those worst hit by the selling. A gauge of Asian equities slid more than 2%. US futures edged higher after Thursday’s slump in the S&P 500 erased its gains for 2025.

Trump said 25% tariffs on Canada and Mexico would come into force from March 4, while Chinese imports would face a further 10% levy. Economists say tariffs may hurt US growth, worsen inflation and possibly spark recessions in Mexico and Canada. China vowed “all necessary measures” against the US moves.

Bitcoin plunged, extending declines from its January peak to over 25%. The dollar edged up and treasuries advanced, with US 10-year yields dropping to around 4.23%, a level not seen since December.

“It had looked as if a degree of ‘tariff fatigue’ had set in, though clearly participants aren’t prepared to ignore this apparent escalation in Trump’s protectionist stance,” said Michael Brown, a strategist at Pepperstone Group Ltd.

A reading of US inflation due later today comes into sharper focus now that tariffs could be implemented sooner than anticipated, with any surprising increases likely to shake up the market.

The Federal Reserve’s preferred inflation metric is expected to cool to the slowest pace since June. The core personal consumption expenditures price index — which excludes often-volatile food and energy costs — probably rose 2.6% in the year through January.

Overall PCE inflation likely eased on an annual basis as well, according to the median estimate in a Bloomberg survey of economists.

Meanwhile, French inflation retreated to its lowest level in four years, bolstering the case for further cuts by the European Central Bank, whose next move is likely to arrive next week. The data spurred gains in European bonds.

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Trump’s unveiling of steeper tariffs on Chinese imports raises the risk Beijing will ramp up its retaliation and a spiraling of tensions between the world’s two largest economies.