Finance
London stocks fall after Trump's tariff threat on Europe over Greenland
Published by Global Banking and Finance Review
Posted on January 20, 2026
2 min readLast updated: January 20, 2026
Quick Summary
UK stocks dropped as Trump threatened tariffs over Greenland, impacting FTSE 100 and increasing market volatility. Precious metals rose as a safe haven.
UK Stocks Decline Amid Trump's Tariff Threat Over Greenland Deal
Impact of Trump's Tariff Threat on UK Markets
Jan 20 (Reuters) - UK stocks slipped on Tuesday, swept up in a global risk-off mode after U.S. President Donald Trump vowed to slap tariffs on European nations until the U.S. is allowed to buy Greenland.
Sector Performance
The blue-chip FTSE 100 was down 1.1% as of 1042 GMT, set for its biggest one-day drop since November 18. The domestically focused mid-cap index dropped 1%. Both indexes were set for their steepest intraday fall since mid-November.
Market Reactions to Economic Data
Trump has threatened to impose an additional 10% tariffs on imports from Denmark, Norway, Sweden and Britain, among others from February 1, unless the United States is allowed to buy Greenland, heightening volatility across global markets.
Future Market Outlook
"What happens next for financial markets will ultimately depend on Trump's actions in the coming days. For now, he is sticking to his guns and said that there is 'no going back' on his Greenland pledge," said Kathleen Brooks, research director at XTB.
Brooks said Trump's comments over Greenland at Davos this week will be critical.
Davos is hosting the World Economic Forum, with world leaders, policymakers and corporate executives scheduled to deliver speeches.
In London, pharmaceutical stocks led losses, down 2.1%, with AstraZeneca down 2.6% after the Anglo-Swedish drugmaker said it would delist its American Depositary Shares and debt securities from Nasdaq.
Ibstock shed 3.9% after the building materials supplier forecast residential construction markets to remain subdued in the near term. It was the biggest loser on the FTSE 250.
Conversely, precious metals miners rose 1.2%, as gold vaulted past $4,700 an ounce for the first time, while silver hovered near record highs, as Trump's tariff threats sparked a flight to safe‑haven assets. [GOL/]
Meanwhile, data showed Britain's jobs market weakened ahead of the government's November budget announcement and wage growth slowed, potentially easing the Bank of England's worries about persistent inflation pressures.
Informa rose 2.6% to top the FTSE 100 after the events organiser launched a £200 million ($269.6 million) share buyback and forecast 6% underlying revenue growth for 2026. The media index was up 0.9%.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Shinjini Ganguli)
Key Takeaways
- •UK stocks fell due to Trump's tariff threat over Greenland.
- •FTSE 100 and mid-cap index saw significant declines.
- •Pharmaceutical stocks led losses in London.
- •Precious metals rose as investors sought safe-haven assets.
- •Market volatility increased amid geopolitical tensions.
Frequently Asked Questions about London stocks fall after Trump's tariff threat on Europe over Greenland
1What is the FTSE 100?
The FTSE 100 is an index that represents the 100 largest companies listed on the London Stock Exchange, reflecting the performance of the UK stock market.
2What is market volatility?
Market volatility refers to the degree of variation in trading prices over time, indicating the level of uncertainty or risk in the market.
3What is a share buyback?
A share buyback is when a company purchases its own shares from the marketplace, reducing the number of outstanding shares and often increasing the share price.
4What is wage growth?
Wage growth refers to the increase in the average pay of workers over time, which can impact consumer spending and economic growth.
