Reuters reports that European shares fell sharply on Monday after U.S. President Donald Trump threatened additional tariffs linked to the purchase of Greenland. The move has reignited trade tensions and cast a shadow over previous international agreements.
The pan-European STOXX 600 fell 1.3% in a gloomy start to a busy week packed with earnings and the World Economic Forum in Davos, which will be scrutinised for tariff cues and geopolitical outlook.
France’s CAC 40 index, Germany’s DAX, and London’s blue‑chip FTSE 100 dropped 1.8%, 1.4%, and 0.4%, respectively.
- France’s CAC 40 fell 1.8%.
- Germany’s DAX dropped 1.4%.
- London’s FTSE 100 declined 0.4%.
Trump announced he would impose a 10% tariff on goods from eight countries starting February 1: Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain. He warned that if no deal to sell Greenland is reached, these duties will increase to 25% on June 1.
The threats have triggered a sharp pushback in Europe, where officials are discussing how to deter Trump while also drafting countermeasures.
The market reaction highlights how disruptive Trump’s use of tariffs as a policy lever remains.
Analysis from ING economists suggests a shift in strategy, noting in a recent report: “The rationale for higher tariffs is now even more political and less economic than in the first half of 2025.”
U.S. markets remained closed on Monday for the Martin Luther King Jr. Day holiday, leaving European markets to react to the geopolitical fallout on their own.
