As European stock markets closed lower this Monday (19) as investors reacted to United States President Donald Trump’s threat to increase tariffs on European countries if they oppose his attempt to buy Greenland.
In London, the FTSE 100 closed down 0.39%at 10,195.35 points. In Frankfurt, the DAX fell 1.31%at 24,966.02 points. In Paris, the CAC 40 lost 1.94%at 8,098.73 points. In Lisbon, the PSI 20 lost 0.82%at 8,568.56 points. In Madrid, the Ibex 35 fell 0.26%at 17,665.30 points. THE FTSE MIB lost 1.32% in Milan, at 45,195.89 points. Quotes are preliminary.
The market drop comes after Trump announced on Saturday (17) that — starting at 10% on February 1 and rising to 25% on June 1 — if a deal is not reached that allows Washington to “buy” Greenland, which is part of Denmark.
Earlier, the republican opted for a cautious tone about how far he would go to take control of the semi-autonomous Danish territory, debating whether or not he would use force to take the island.
German Chancellor Friedrich Merz said he will try next Wednesday (21) at the World Economic Forum in Davos.
For ING analysts, Trump’s new approach serves as a reminder that the relationship between the United States and Europe has changed. “Much will depend on whether the US government’s claim to Greenland is merely a maximalist negotiating position or a genuine final demand,” they assess.
The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, said this Monday (19) that “it is still too early” to assess the impact of the latest trade tensions between the United States and Europe.
European automakers and the luxury goods sector have been hit hard by Trump’s new onslaught. Volkswagen shares fell around 2.66%, Porsche shares fell 2.72% and BMW shares lost 3.7%. Among stocks in the European luxury sector, LVMH fell 4.74%, Kering fell 4.43%, Hermès fell 3.56% and Moncler fell 1.96%.
In the opposite direction, defense stocks rose as tensions rise. Rheinmetall shares rose 1.05%, while French Thales gained 0.73%.
