FX.co ★ European Stocks Pull Back Sharply

European stock markets experienced significant declines on Monday, retreating from their record highs achieved the previous week. This drop occurred after U.S. President Trump issued a threat to impose tariffs on major European economies. The STOXX 50 index in the Eurozone fell by 1.7% to 5,922, while the STOXX 600 decreased by 1.2% to 607. President Trump announced plans to impose a 10% tariff by the end of the month on countries including Germany, the UK, France, Sweden, Norway, the Netherlands, Finland, and Denmark, should they continue to resist the proposed sale of Greenland to the United States. The tariffs are set to increase to 25% by June. In retaliation, the European Union is in talks to consider levying tariffs on up to €93 billion worth of U.S. goods. The luxury brand and automotive sectors, heavily reliant on U.S. clients, felt the brunt of this announcement. LVMH, Adidas, and Hermes suffered declines ranging from 5% to 3.5%, while BMW and Volkswagen saw decreases of 4% and 3%, respectively. Conversely, defense companies benefited from these developments, with shares of Rheinmetall, Dassault, SAAB, and Leonardo rising between 4% and 1.5%.