The tariff threat — directed at Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland — drew a joint rebuke from the targeted governments that the AP described as the most forceful statement from European allies since Trump returned to the White House, warning that the tariffs could set off ‘a dangerous downward spiral’ in transatlantic relations.
President Donald Trump’s threat on Saturday to impose an additional 10 percent tariff on imports from eight European nations that oppose U.S. control of Greenland moved markets on Monday, sending European stocks mostly lower and pushing U.S. futures into negative territory while American exchanges were closed for Martin Luther King Jr. Day.
Germany’s DAX fell 1.3 percent to close at 24,960.33, France’s CAC 40 declined 1.9 percent to 8,101.96, and Britain’s FTSE 100 shed 0.4 percent to 10,190.26, according to the Associated Press. Among U.S. futures, the S&P 500 dropped 1 percent, the Dow Jones Industrial Average fell 0.8 percent, and the Nasdaq composite slid 1.2 percent as of 11:48 a.m. Eastern time.
Trump said Saturday he would impose the additional import tax beginning in February on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland because of their opposition to American control of Greenland.
The eight targeted governments issued a joint statement denouncing the threats. They said the tariffs “undermine transatlantic relations and risk a dangerous downward spiral.” The AP reported the statement as the most forceful rebuke from European allies since Trump returned to the White House.
Stephen Innes, of SPI Asset Management, said Trump’s moves are testing the strategic alignment and institutional trust underlying support from Europe, which he described as the largest trading partner and provider of financing to the United States. “In a world where geopolitical cohesion within the Western alliance is no longer taken for granted, the willingness to recycle capital indefinitely into U.S. assets becomes less automatic,” Innes said in a commentary. “This is not a short-term liquidation story. It is a slow rebalancing story, and those are far more consequential.”
Asian markets mixed; China reports 5% growth for 2025
Asian shares were mixed. Hong Kong’s Hang Seng index lost 1.1 percent to 26,563.90, and Tokyo’s Nikkei 225 declined 0.7 percent to 53,583.57. South Korea’s Kospi jumped 1.3 percent to 4,904.66, pushing further into record territory on gains for technology companies, including chip maker SK Hynix.
The moves followed China’s report that its economy expanded at a 5 percent annual pace in 2025, though growth slowed in the fourth quarter. Strong exports helped offset relatively weak domestic demand, according to the AP, even as Trump has imposed higher tariffs on imports from China.
Wall Street faces earnings, PCE data this week
On Friday, U.S. stocks edged lower. The S&P 500 fell 0.1 percent, the Dow industrials lost 0.2 percent, and the Nasdaq shed 0.1 percent, all posting small weekly losses. The Nasdaq Composite stood at 23,515.39 at Friday’s close, with futures pointing to a decline when U.S. markets reopen Tuesday.
Investors this week will receive quarterly earnings from United Airlines, 3M, and Intel. The government is also scheduled to release the personal consumption expenditures price index — the Federal Reserve’s preferred measure of inflation. The PCE Price Index ran at 2.79 percent year-over-year as of the most recent available reading, above the Fed’s 2 percent target.
The Fed is expected to hold its benchmark interest rate unchanged at its next policy meeting in two weeks, according to the AP, as policymakers continue to weigh a slowing jobs market against inflation that remains elevated.
In commodity markets Monday, U.S. benchmark crude oil rose 12 cents to $59.58 per barrel and Brent crude, the international standard, added 5 cents to $64.17 a barrel. Gold gained 1.8 percent and silver climbed 6.2 percent.