European stock markets fell broadly on Thursday after U.S. President Donald Trump on Wednesday again threatened to impose 25% tariffs on imports from the European Union.

The Stoxx 600 provisionally closed 0.51% lower, paring earlier losses, as car prices plunged 4%. The highly globalized sector was rocked earlier this month by expectations of escalating U.S. trade tensions with the rest of the world. Data earlier this week showing a 2.6% year-on-year decline in passenger car sales further dampened sentiment around the industry.

Meanwhile, Ferrari shares plunged almost 8% after Exor, the holding company of Italy's Agnelli family, announced it had sold about a 4% stake in the company.

Aerospace and defense company Rolls Royce jumped 16% after the company raised its medium-term targets in its full-year results, posted higher revenue and profit, and reinstated a shareholder dividend. British building materials supplier Howden Joinery was among the worst performers, falling more than 6% after narrowly missing full-year earnings expectations despite announcing a £100 million ($126.7 million) share buyback. At Trump's first Cabinet meeting on Wednesday, he said tariffs on Canada and Mexico would come into effect on April 2 and that his trade war would include a 25% tariff on EU goods. "We'll be announcing that soon," he told assembled reporters. "In general, it will be 25% and it will apply to cars and everything else. "They've really taken advantage of us … They won't take our cars, basically, they won't take our agricultural products. They've used all sorts of excuses as to why not. And we've accepted them all," Trump said at his Cabinet meeting.

A European Commission spokesman told CNBC: "As has been stated before, the EU will react forcefully and immediately to unjustified barriers to free and fair trade, including when tariffs are used to challenge legitimate, non-discriminatory policies."

Investors are looking for other big earnings on Thursday, with Daimler Truck, Swiss Re, AXA, Veolia, Metro Bank, WPP, Iberdrola, St. James's Place, Taylor Wimpey, Man Group, LSEG, Aviva, Telefonica, Teleperformance, Saint-Gobain and EDP all reporting.

The data releases include the latest Spanish inflation rate, Italian business and consumer confidence data, and euro zone economic sentiment figures. (Newsmaker23)

Source: CNBC