(Bloomberg) -- European stocks opened lower as the auto sector tumbled again after President Donald Trump rejected EU’s offer to scrap tariffs on cars.

The Stoxx 600 Index was down 0.6 percent, on track to post a loss of 2.1 percent for August, its biggest monthly drop since March. The Stoxx autos sector index was down 1.5 percent on Friday. The sector, one of the most hit by fears over global trade, has tumbled 5.5 percent this month.

Reports that Trump is said to move ahead with a plan to impose tariffs on $200 billion in Chinese imports as soon as next week was also adding to negative sentiment, with basic resources stocks dropping.

"The main story and focus is the escalation of the U.S.-China trade conflict," said Martin Guri, head of Nordic strategy at Kepler Cheuvreux."The U.S. will most likely impose the 25 percent tariff on goods worth additional $200 billion. And of course China will counteract imposing quantitative (tariffs on goods) and qualitative (red tape) measures".

Investors were also concerned by a renewed plunge in the currencies of Argentina and Turkey, reviving fears that crises in these markets could spread globally.

To contact the reporter on this story: Hanna Hoikkala in Stockholm at hhoikkala@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Blaise Robinson

©2018 Bloomberg L.P.

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