Finance
London stocks fall after Trump issues tariff threat to European nations
Published by Global Banking and Finance Review
Posted on January 19, 2026
2 min readLast updated: January 19, 2026
Quick Summary
London stocks fell as Trump threatened tariffs on Europe, affecting trade deals and market stability. FTSE 100 dropped 0.6%, with broad-based losses.
London stocks fall after Trump issues tariff threat to European nations
Impact of Tariff Threats on London Stocks
Jan 19 (Reuters) - London shares fell on Monday after U.S. President Donald Trump threatened tariffs on Britain and seven other European nations unless the U.S. was allowed to buy Greenland, rattling investors and undermining recent trade agreements.
Market Reactions and Sector Performance
The blue-chip FTSE 100 was down 0.6% as of 1038 GMT. The domestically focused mid-cap index dropped 0.9%, set for its worst one-day fall since late November.
Responses from European Leaders
Trump said on Saturday he would impose an additional 10% levy from February 1 on goods imported from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, rising to 25% on June 1 if there was no deal on Greenland.
Analysis of Trade Deal Implications
The announcement unsettled global markets, with volatility returning to trading floors.
Major EU states condemned the tariff threats as blackmail, and France proposed responding with a range of previously untested economic countermeasures.
British Prime Minister Keir Starmer, meanwhile, called for calm discussions to resolve the stand-off.
The tariff threats also cast a shadow over trade deals the U.S. struck with Britain in May and the EU in July. Both limited agreements have already drawn criticism for their lopsided nature, favouring Washington.
Losses were broad-based across London's stock market, with banking and healthcare shares weighing most heavily on the FTSE 100.
Luxury retailers too dropped on the day, with Burberry and Watches of Switzerland Group leading the losses with falls of 2.8% and 1.5%, respectively.
However, precious metal miners surged 2.5% as gold and silver hit record highs amid a flight to safety. Aerospace and defense stocks also climbed 0.4%.
Among other movers, WH Smith jumped 9% after the travel retailer named ex-Balfour Beatty chief Leo Quinn as executive chair, replacing Annette Court in a leadership shakeup aimed at reviving the business and restoring investor confidence.
(Reporting by Ragini Mathur in Bengaluru; Editing by Harikrishnan Nair)
Key Takeaways
- •London stocks fell after Trump's tariff threats.
- •FTSE 100 dropped 0.6%, mid-cap index down 0.9%.
- •Tariffs target eight European nations, including the UK.
- •EU leaders condemned the threats as blackmail.
- •Precious metal miners surged amid market volatility.
Frequently Asked Questions about London stocks fall after Trump issues tariff threat to European nations
1What is the FTSE 100?
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, reflecting the overall performance of the UK stock market.
2What is market volatility?
Market volatility refers to the rate at which the price of securities increases or decreases for a given set of returns, indicating the level of risk in the market.
3What is a blue-chip stock?
Blue-chip stocks are shares in large, well-established, and financially sound companies that have a history of reliable performance and stable earnings.
