PayPal's shares fell 5 per cent on Friday after comments from a European Union lawmaker raised concerns that payments firms could get swept up in escalating trade tensions and potential tariffs between the US and Europe, reports Reuters.
Uncertainty over tariffs and mounting trade actions have unsettled global markets, causing volatility, straining supply chains and shifting investor sentiment across industries.
Earlier this week, US President Donald Trump said larger tariffs could be placed on the European Union and Canada if they both work together "to do economic harm to the USA."
"In the case of digital service providers, there is also a huge economic interest on the part of US companies," said Bernd Lange, the head of the European Parliament's international trade committee. "In this respect, you can also look at charging fees on PayPal or Google."
Separately, on Friday, a German government spokesperson also said "nothing is off the table" with regard to punitive measures in response to the threat of US tariffs.
PayPal declined to comment on the matter.
Tariffs on finance and payments are typically difficult to impose, as these sectors rely on digital transactions and services rather than cross-border trade in physical goods, complicating traditional trade enforcement.
Analysts remained skeptical about the likelihood of such a move.
"Not a lot of details here. Definitely 'sell first and ask questions later' for the stock," Argus Research analyst Stephen Biggar said. "Tariffs have to us been a negotiating tool so not sure how much, if any, of this will ultimately be implemented."
