European Stocks Tumble as Trump's Greenland Tariff Threats Escalate Trade War
European stock markets declined significantly following Trump's announcement of additional 10% tariffs on eight European countries over Greenland dispute, with STOXX 600 falling 1.30% and major indices posting losses. The EU has prepared a comprehensive $108 billion retaliation package including tariffs and anti-coercion measures, while Trump's structured tariff timeline threatens escalation to 25% by June 2026 if no deal is reached.
*this image is generated using AI for illustrative purposes only.
European stock markets suffered sharp declines as President Donald Trump's escalating tariff threats over Greenland intensified trade tensions between the United States and European allies. The pan-European STOXX 600 fell 1.30% in a gloomy start to a week packed with earnings and the World Economic Forum in Davos, while the European Union has mobilized retaliatory measures worth $108 billion in response to the mounting trade confrontation.
European Market Performance
Major European indices posted significant losses following Trump's tariff announcement, with investors fleeing to safer assets amid renewed trade uncertainty:
| Index: | Decline (%) |
|---|---|
| STOXX 600: | -1.30% |
| France CAC 40: | -1.80% |
| Germany DAX: | -1.40% |
| UK FTSE 100: | -0.40% |
The market moves underline how disruptive tariff threats remain as the U.S. president wields them as a policy lever, including against countries that have already struck trade agreements with Washington.
Trump's Structured Tariff Timeline
Trump announced a comprehensive tariff framework targeting eight European countries supporting Greenland, with specific implementation dates and escalation mechanisms:
| Implementation Date: | Tariff Rate | Target Countries |
|---|---|---|
| February 1, 2025: | 10% additional tariffs | Denmark, Norway, Sweden, France |
| June 1, 2026: | 25% if no deal reached | Germany, Netherlands, Finland, Britain |
The targeted countries include those that have sent military personnel to Greenland amid Trump's acquisition plans for the Arctic territory.
EU's $108 Billion Retaliation Package
European Union ambassadors have reached broad agreement on comprehensive retaliatory measures designed to counter American trade pressure:
| Retaliation Measure: | Value/Impact |
|---|---|
| Tariff Package: | $107.70 billion on US imports |
| Implementation: | February 6 (automatic activation) |
| Anti-Coercion Instrument: | Limits on public tenders, investments |
| Digital Services Restrictions: | Targeting US trade surplus areas |
The tariff package commands broader support as a first response compared to anti-coercion measures, where support remains "very mixed" according to EU sources.
Market Impact and Safe-Haven Assets
US stock futures also tumbled following the tariff announcement, with the Dow Jones futures declining over 320 points, S&P 500 futures falling 52 points, and Nasdaq futures dropping close to 250 points. As equity markets entered risk-off mode, precious metals emerged as clear beneficiaries, with both gold and silver reaching record high levels.
Diplomatic Response and Emergency Measures
The threats have triggered sharp pushback in Europe, where officials are discussing how to deter Trump while drafting potential countermeasures. EU leaders are set to discuss options at an emergency summit in Brussels, with Danish Prime Minister Mette Frederiksen stating firmly: "Europe will not be blackmailed." ING economists noted that "the rationale for higher tariffs is now even more political and less economic," highlighting the shift in Trump's trade strategy.
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