Washington, United States. Global markets faced renewed volatility after President Donald Trump vowed to impose tariffs on eight European nations unless the United States is allowed to buy Greenland, adding trade uncertainty as stocks fell and the dollar weakened.
Tariff plan and timeline
Trump said he would impose an additional 10% import tariff from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain. He said the tariff would rise to 25% on June 1 if no deal is reached.
European reaction
Major European Union states decried the tariff threats over Greenland as blackmail on Sunday. France proposed responding with a range of previously untested economic countermeasures.
Currency moves
The euro firmed 0.26% to $1.1628 after initially dropping to its lowest since November, as investors sold off the dollar broadly and lifted other major rival currencies. The implications for the dollar were less clear, although the greenback was broadly lower on Monday.
Equities and risk sentiment
In European markets, EUROSTOXX 50 futures and DAX futures both fell 1.1%. Japan’s Nikkei dropped 1% as risk-off sentiment prevailed.
Berenberg chief economist Holger Schmieding said hopes that the tariff situation had calmed down for the year had been dashed, adding that markets were back in a situation similar to last spring.
Market context and U.S. trading conditions
Trump’s sweeping “Liberation Day” tariffs in April 2025 sent shockwaves through markets. Investors later largely looked past U.S. trade threats in the second half of the year, viewing them as noise and responding with relief as Trump made deals with Britain, the EU and others.
While the lull may be over, market moves on Monday could be dampened by the experience that investor sentiment was more resilient than expected in 2025 and global economic growth stayed on track.
U.S. markets were closed on Monday for Martin Luther King Jr. Day, delaying any reaction on Wall Street. U.S. stock futures were 0.7% lower in early Asian hours. The cash Treasury market was shut, but 10-year futures firmed 1 tick.
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