The pan-European Stoxx 600 traded 0.25 percent lower with most sectors in negative territory. Auto stocks and basic resources were under pressure on trade concerns.
Looking at individual stocks, Micro Focus and Elisa fell following downgrades from brokers. At the other end, Indivior rose almost 17 percent after obtaining a preliminary injunction against Dr Reddy's Laboratories for selling copycat versions of its drugs. Deutsche Bank rose more than 7 percent after posting second-quarter results above consensus.
On Wall Street, stocks opened little changed as the corporate earnings season kicked into full swing.
Market players kept a close eye on Helsinki, Finland, where President Donald Trump and Russian President Vladimir Putin met for their first summit. Amid concerns over Russian interference in the 2016 presidential election, Putin denied any meddling from the Kremlin.
Meanwhile, Chinese officials exchanged some market access offer with the European Union. Over the weekend, Trump labeled the European Union a “foe” when it comes to trade.
Trade and political concerns could weigh on Germany’s economic performance. Bundesbank Governor Jens Weidmann told the German government at a cabinet meeting that there are increasing risks of an economic slowdown due to trade and political events. The central bank cut its growth forecasts for this year last month, Reuters reported.
In terms of data, the euro zone narrowed its trade surplus in May for the third month in a row. The surplus stood at 16.9 billion euros ($19.77 billion) in May from 18 billion euros in April.
Meanwhile, oil prices dipped after U.S Treasury Secretary Steven Mnuchin said the Trump administration would consider waivers for some countries to allow them to continue buying oil from Iran. Trump withdrew from the Obama-era Iran nuclear deal and restored sanctions on Iran earlier this year.