European markets dropped sharply after U.S. President Donald Trump threatened tariffs on eight nations opposing his Greenland acquisition plan. Germany’s DAX fell 1.3%, France’s CAC slipped 1.6%, and the U.K.’s FTSE 100 declined 0.4%.

Trump proposed a 10% tariff starting February 1, escalating to 25% by June if no deal is reached. The targeted countries include France, Germany, and the U.K., along with Nordic states. The EU has paused ratification of its trade agreement with the U.S., and reports suggest it may revive a €93 billion tariff package.

Market analysts warn of a potential transatlantic trade rift, with safe-haven assets gaining and oil prices slipping. Investors are watching developments ahead of the World Economic Forum in Davos, where global leaders—including Trump—are set to meet. U.S. tech stocks operating in Europe could also face regulatory retaliation.

The eurozone’s December CPI is due Monday, expected to hit the ECB’s 2% target for the first time since mid-2025. Despite healthy growth, the central bank has signaled no immediate policy changes.