European stock markets continued their downward trend on Friday as investors reacted to the U.S. tariffs announced earlier in the week.

The regional Stoxx 600 index dropped by 1.7%, while the banking sector fell an additional 5.8%, following a 5.53% drop on Thursday.

The Stoxx 600 closed 2.57% lower on Thursday as the world grappled with the steep tariffs imposed by U.S. President Donald Trump on over 180 countries, fueling fears of a global trade war.

Retail was one of the hardest-hit sectors on Thursday, with the Stoxx Luxury 10 index dropping 5.2% in its worst session in nearly four years.

Shares of shipping giants Maersk and Hapag-Lloyd, key indicators of global economic health, both fell by more than 9%.

The tariffs hit hardest on export-dependent, developing economies in Asia, which produce garments and other consumer goods for global markets.

This week also saw the implementation of Trump’s 25% tariffs on imported vehicles to the U.S., adding to his existing duties on steel and aluminum.

The euro surged to a six-month high against the U.S. dollar on the news, but dipped 0.2% on Friday morning.

On Thursday, the European Union announced it would prepare countermeasures against the U.S. if negotiations fail.

French President Emmanuel Macron urged French companies to halt planned investments in the U.S., while acting German economy minister, Robert Habeck, stated that Trump would “buckle under pressure” if Europe united in its response.

The EU faced tariffs of 20%, the U.K. 10%, Norway 15%, and Switzerland 31%.