LONDON — European stocks sold off on Tuesday as the specter of new tariffs persisted, hurting market confidence.
The pan-European Stoxx 600 had fallen 1.2% as of 1:41 p.m. in London (8:40 a.m. ET), with all sectors and major regional exchanges in negative territory.
The market plunge comes after Trump announced on Saturday that eight European allies would face increasing tariffsfrom 10% on February 1 and up to 25% on June 1, if an agreement is not reached allowing Washington to “buy” Greenland, a semi-autonomous territory that is part of Denmark.
The proposed tariffs would target Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland, Trump said. European leaders have fight back against tariffs and called for more dialogue with the United States
European leaders have describe Trump’s new tariff threats are deemed “unacceptable” and are reportedly considering countermeasures – with France pushing for the European Union to use its strongest economic counterthreat, known as the “anti-coercion instrument”.
Stocks listed in export-focused Germany collapsed following threats from the White House. DAX the index fell 1.4% and the MDAX – an index composed of mid-cap German stocks – lost 2.1%.
On Tuesday, Trump also threat to impose 200% customs duties on French wine and champagne after French President Emmanuel Macron’s decision reported of not wanting to join his “Peace Council” on Gaza.
Shares listed in Paris of the luxury giant LVMH – which owns Moët & Chandon, Dom Pérignon and Veuve Clicquot – were down 2.2%, while French drinks giant Remy Cointreau — maker of Telmont champagne — lost 2%.
that of France CAC40 the index was last seen down around 1.1%. Speaking on Tuesday at the World Economic Forum in Davos, Switzerland, Macron denounced “bullies.”
“We prefer respect to bullies… we prefer the rule of law to brutality,” he said. “Europe now has very powerful tools and we must use them when we are not respected and when the rules of the game are not respected. The anti-corruption mechanism is a powerful instrument and we should not hesitate to deploy it in today’s difficult environment.”
THE euro was up 0.8% against the dollar, at $1.174, while the single currency also rose 0.6% against the pound sterlingor 0.87 euros.
Sterlingmeanwhile, gained 0.2% against the greenback, trading at $1.345.
It comes as UK employment data released by the Office for National Statistics showed the country’s unemployment rate remained unchanged at 5.1% in the three months to the end of November, while wage growth slowed to 4.5%.