Trump's plan would see 5% tariffs imposed from that date, increasing to 10% on July 1 and by 5 percentage points every month until they reach 25% unless illegal immigration across the southern border is "substantially" stopped.

Carmakers Fiat Chrysler and Volkswagen, which import cars to the U.S. from Mexican plants, were among the worst hit, falling 4.9% and 3.6% respectively.

Madrid-listed bank BBVA, which operates in Mexico through its subsidiary BBVA Bancomer and reported 7.193 billion euros in gross income from the country last year, fell 4.1%.

Shares in Italian steel pipe maker Tenaris tumbled 5.1%. The company is exposed through its fully-owned subsidiary TenarisTamsa and a joint venture stake in electrical power plant Techgen.

It had more employees in Mexico than in any other region in 2018.

The Europe-listed Xtrackers MSCI Mexico UCITS exchange-traded fund (ETF) also slumped 6%. In the currency market, the Mexican peso fell 3.2% against the dollar to a five-month low.

(Reporting by Helen Reid and Tom Arnold; editing by Marc Jones and Jan Harvey)