Autos stocks sold off rapidly, down 1.3 percent, and Germany's DAX index fell into negative territory, down 0.2 percent as big German carmakers Daimler, Volkswagen, and BMW suffered.
Volkswagen fell 1 percent, Daimler fell 1.5 percent, and BMW fell 2.2 percent. Italian carmaker Fiat Chrysler also lost 2.8 percent after Trump tweeted the tariff threat.
(Reporting by Helen Reid; Editing by Julien Ponthus)