President Donald Trump's threat to impose a sweeping 50% tariff on all European Union imports starting June 1 sparked a broad selloff across European markets Friday, triggering fears of a transatlantic trade war just as global growth faces renewed pressure.

In a post on Truth Social, Trump said the EU's "powerful Trade Barriers, VAT Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against American Companies" were to blame for an annual trade deficit exceeding $250 billion, which he called "totally unacceptable."

The proposed tariff would exempt goods manufactured in the United States, potentially creating sharp distortions for EU-based exporters and global supply chains.

European Benchmarks Tumble

The fallout was immediate in markets. The Euro STOXX 50 index - as closely tracked by the iShares MSCI Eurozone ETF (EZU  ) - dropped 3%, Italy's FTSE MIB sank 2.9%, France's CAC 40 lost 2.6% and Spain's IBEX 35 fell 2.2%.

Germany's DAX, as tracked by the iShares MSCI Germany Index Fund (EWG  ), which is home to many export-heavy firms, slid 2.3%.

Financial stocks bore the brunt of the decline, with Deutsche Bank AG DB falling 6.1%, Société Générale SA (SCGLY  ) down 5.3% and Banco Bilbao Vizcaya Argentaria SA (BBVA  ) sliding 5%.

Industrial and luxury exporters also came under heavy pressure, including Bayerische Motoren Werke AG (BMWYY  ), or BMW (−4.5%), UniCredit SpA (UNCRY  ) (−4.5%) and EssilorLuxottica SA (ESLOY  ) (−4.2%).

Export Exposure To US Trade Is Key

The tariff threat has placed a spotlight on European companies heavily reliant on U.S. revenues.

In Germany, Adidas AG (ADDYY  ) derives roughly a third of its revenue from the United States, while SAP SE (SAP  ) generates about 40% of its turnover from North America.

Chipmaker Infineon Technologies AG (IFNNY  ) is also significantly exposed due to its automotive and electronics customers.

French luxury and tech firms are equally at risk. LVMH Moët Hennessy Louis Vuitton SE (LVMUY  ) earns close to 25% of its revenue in the U.S., while Dassault Systèmes SE (DASTY  ) has a strong footprint in North American enterprise software. Hermès International SA (HESAY  ) pulls about 20-25% of its sales from the American market.

Italian brands like Ferrari NV (RACE  ), with over 30% of sales from the U.S., and EssilorLuxottica SA (ESLOY  ), which owns Oakley and Ray-Ban, are also vulnerable.

In the Netherlands, tech heavyweight ASML Holding NV (ASML  ) earns about 20-25% of revenue from the U.S., and Koninklijke Philips NV (PHG  ) maintains a major healthcare business across North America.

EU Retaliation Risk Grows For US Stocks

For U.S. corporations with heavy exposure to Europe-particularly in tech, autos, agriculture and aviation-the economic consequences could be significant if the European Union responds in kind.

The 2018 EU countermeasures to Trump's steel tariffs included duties on motorcycles, bourbon and orange juice-strategic hits on U.S. swing-state exports.

EU officials may also revisit tech taxation disputes, where U.S. firms like Apple Inc. (AAPL  ), Alphabet Inc. (GOOG  ) (GOOGL  ) and Microsoft Corp. (MSFT  ) are already under regulatory scrutiny.