European stocks fell sharply Monday after President Trump threatened sweeping tariffs on eight allied nations in a bid to force the sale of Greenland.
European stocks fell sharply Monday after President Trump threatened sweeping tariffs on eight allied nations in a bid to force the sale of Greenland — rattling investors and reviving fears of a full-blown transatlantic trade war while US stock markets were closed for the Martin Luther King Jr. Day holiday.
The Stoxx Europe 600 index plummeted 1.2% as investors dumped export-heavy names exposed to the US market.
Germany’s DAX dropped 1.3% to its lowest level in nearly two weeks, while France’s CAC 40 fell 1.8%, weighed down by heavy losses in luxury stocks.
London’s FTSE 100 fell a more modest 0.4%, cushioned by its heavier exposure to defensive sectors.
Luxury and auto shares were among the hardest hit, with LVMH, BMW and Volkswagen sliding on concerns that new tariffs would slam sales in the US — a critical market for Europe’s biggest exporters.
The selloff came after Trump warned Saturday he would impose a 10% tariff on all goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland starting Feb. 1, with the levy set to rise to 25% by June if negotiations over Greenland fail.
Investors were particularly rattled by the exposure of luxury and automakers to US demand, with traders warning that even modest tariffs could squeeze margins or force price increases that risk cooling demand.
