economy
January 20, 2026
European stocks sell off after Trump's tariff threats revive trade war jitters
European stocks finished Tuesday's trading session in negative territory as the specter of fresh trade tariffs lingered, hurting market sentiment.
TL;DR
- European stocks fell sharply as President Trump announced potential new tariffs on eight European allies.
- The proposed tariffs are set to start at 10% on Feb. 1 and rise to 25% on June 1 if a deal for the U.S. to 'buy' Greenland is not reached.
- Targeted countries include Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands, and Finland.
- European leaders described the threats as 'unacceptable' and are considering countermeasures.
- France is reportedly advocating for the EU to use its 'Anti-Coercion Instrument.'
- German stocks, particularly the DAX and MDAX indices, saw notable declines.
- Trump also threatened 200% tariffs on French wine and champagne.
- Shares of LVMH and Remy Cointreau were down following these threats.
- French President Macron criticized 'bullies' and emphasized the use of strong EU economic tools.
- Currency markets saw the euro rise against the dollar and British pound, while sterling also gained against the dollar.
- U.K. unemployment remained unchanged, and wage growth eased.
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