European shares fell sharply on Monday after U.S. President Donald Trump threatened additional tariffs until the United States was allowed to buy Greenland, reigniting trade tensions and casting doubt on deals reached earlier.
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.
Trump said he would impose an additional 10% tariff starting February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain. This will rise to 25% on June 1 if no deal is reached, he said.
The threats have triggered a sharp pushback in Europe, where officials are discussing how to deter Trump while also drafting potential countermeasures.
Still, the market moves underline how disruptive the threats of tariffs remain as the U.S. president wields them as a policy lever, including against countries that have already struck trade agreements with Washington.
“The rationale for higher tariffs is now even more political and less economic than in the first half of 2025,” ING economists said in a note.
U.S. markets were shut on Monday for Martin Luther King Jr. Day.
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