European shares retreated on Friday, giving back gains from the previous session, as automobile stocks weighed and investors awaited updates on EU-U.S. trade talks ahead of U.S. President Donald Trump's tariff deadline next week.

The European Union dominates critical pharmaceutical imports into the United States, making the 30% tariffs Trump threatened to go into effect Aug. 1 particularly risky.

Leaders of the European Union and Japan have launched an alliance aimed at boosting economic cooperation, defending free trade and countering unfair trade practices as the two sides face growing challenges from the United States and China.

Trump's threatened 30% tariff on EU imports is complicating the ECB's decision-making but is unlikely to derail plans for a pause in rate cuts, five ECB policymakers told Reuters last week. The ECB signalled after its June meeting that it was likely to keep interest rates unchanged on July 23-24.

Chinese and most European indexes rose, and Japan’s TOPIX hit a record high, on trade optimism. Are 15% tariffs the new benchmark for trading with the U.S.? WSJ’s Kim Mackrael discusses. Plus, Tesla’s profit plunges as EV sales continue to drop,

Chinese leader Xi Jinping told visiting European Union leaders that Europe should make “the right strategic choice” and enhance cooperation with China for global “stability,” as the two sides tackle deep-seated grievances at a key summit.

LVMH's CEO Bernard Arnault plans to open a second factory in Texas, he said on Thursday, while the luxury group is anticipating a good outcome soon from trade talks between the U.S. and Europe.