By Jonathan Cable, Leika Kihara and Lucia Mutikani LONDON/TOKYO/WASHINGTON (Reuters) -European manufacturing took another step towards stabilisation in May but U.S. activity contracted for a third straight month and Asian factory activity shrank as soft demand in China and U.

The European Union is preparing “countermeasures” against the United States if the two sides cannot reach a deal after surprise U.S. tariffs on steel rattled global markets and complicated the ongoing negotiations between Brussels and Washington.

Global stocks mostly dipped on Monday as investors digested President Donald Trump’s doubling of tariffs on American’s steel imports and as trade tensions with China flare up once again.

Shares of several major U.S. steel companies jumped Monday after President Trump said he would hike tariffs to 50%.

Skyline view of the City of London financial district from the viewpoint in Greenwich Park in London, United Kingdom. This is CNBC's live blog covering European financial markets. Good morning from London, where futures data from IG suggest stock markets will nudge higher at the open — following declines in France, Germany and Italy.

European stock markets commenced the trading week on a weaker footing Monday, retreating from recent gains as fresh tariff pronouncements from US President Donald Trump threatened to reignite global trade tensions.

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