European stocks fall after Trump threatens tariffs – Business News
European stocks fell sharply Monday after President Trump threatened sweeping tariffs on eight allied nations in a bid to power the sale of Greenland — rattling buyers and reviving fears of a full-blown transatlantic commerce conflict whereas US stock markets have been closed for the Martin Luther King Jr. Day vacation.
The Stoxx Europe 600 index plummeted 1.2% as buyers dumped export-heavy names uncovered to the US market.
Germany’s DAX dropped 1.3% to its lowest degree in almost two weeks, whereas France’s CAC 40 fell 1.8%, weighed down by heavy losses in luxurious stocks.
European stocks fell sharply on Monday after President Trump threatened sweeping tariffs on eight allied nations in a bid to power the sale of Greenland. Getty Images
London’s FTSE 100 fell a more modest 0.4%, cushioned by its heavier publicity to defensive sectors.
Luxury and auto shares have been among the many hardest hit, with LVMH, BMW and Volkswagen sliding on issues that new tariffs would slam gross sales within the US — a vital market for Europe’s greatest exporters.
The selloff got here after Trump warned Saturday he would impose a 10% tariff on all items from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland beginning Feb. 1, with the levy set to rise to 25% by June if negotiations over Greenland fail.
Investors have been significantly rattled by the publicity of luxurious and automakers to US demand, with merchants warning that even modest tariffs might squeeze margins or power price will increase that risk cooling demand.
Defense stocks bucked the broader market rout, with shares of Saab, Rheinmetall and Dassault Aviation every rising more than 2% as buyers guess Europe might enhance army spending if tensions with Washington escalate.
Germany’s DAX dropped 1.35% to its lowest degree in almost two weeks, whereas France’s CAC 40 fell 1.8%, weighed down by heavy losses in luxurious stocks. AFP through Getty Images
Meanwhile, buyers additionally plowed into save-haven property. The price of gold set a new document — following a yr of regular positive factors — and the Swiss franc strengthened because the greenback weakened.
Spot gold jumped 1.7% to $4,672.49 an ounce by about midday Eastern Time after hitting a document of $4,689.39.
US futures pointed to a tough open on Wall Street on Tuesday, with S&P 500 and Nasdaq contracts down about 1% as merchants braced for retaliation and broader fallout.
Trump’s newest tariff threats landed because the Supreme Court weighs his use of emergency powers to impose levies, including one other layer of uncertainty for buyers already rattled by geopolitical risk.
A ruling towards the administration might power the White House to transform its tariff strategy even because it escalates strain on Europe.
Treasury Secretary Scott Bessent expressed confidence Sunday that the very best courtroom within the land would keep the tariffs in place.
“I believe that it is very unlikely that the Supreme Court will overrule a president’s signature economic policy,” he advised NBC’s “ Meet the Press.”
“They did not overrule Obamacare,” Bessent defined, referring to a June choice to uphold a key Affordable Care Act provision. “I believe that the Supreme Court does not want to create chaos.”
The European selloff unfold throughout the continent Monday as buyers braced for a response from Brussels, the place European officers signaled they have been making ready countermeasures that would sharply limit US corporations’ entry to the only market.
European leaders warned the tariff menace risked triggering a harmful escalation, underscoring that Greenland is an autonomous territory of Denmark and never for sale.
French President Emmanuel Macron is pushing the European Union to make use of a “trade bazooka” — doubtlessly limiting US entry to the EU market.
On Monday, German Chancellor Friedrich Merz tried to get Macron to tone it down.
“France is affected by the American tariffs to a different extent than we are, and in this respect I understand that the French government and the French president want to react a little more harshly than we do,” Merz stated.
“Nevertheless, we are trying to adopt and will manage to find a common position” earlier than EU leaders meet Thursday in Brussels, he added.
Markets are actually centered on whether or not the European Union retaliates — and how fast — with merchants eyeing potential targets starting from US technology corporations to aerospace and agricultural exports.
