London shares fell on Monday after U.S. President Donald Trump’s warning of tariffs on Britain and seven other European nations unless the U.S. was allowed to buy Greenland, causing unease among investors and putting recent trade agreements at risk. The blue-chip index was down 0.6% as of 1038. The domestically focused mid-cap index fell by 0.9%, marking its most significant one-day decline since late November.
On Saturday, Trump announced that he would implement an additional 10% tariff starting February 1 on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain. This levy will rise to 25% on June 1 if an agreement concerning Greenland is not achieved. The announcement triggered a wave of reactions in global markets, with volatility returning prominently to trading floors.
Leading EU countries criticized the tariff threats as a type of coercion, with France proposing a reaction that includes a range of previously untried economic strategies. British Prime Minister Keir Starmer, in the meantime, called for composed conversations to address the impasse. The tariff threats cast a significant shadow over the trade agreements the U.S. made with Britain in May and the EU in July. Both limited agreements have already encountered backlash due to their inequitable nature, leaning towards Washington. Losses were widespread throughout London’s stock market, with banking and healthcare shares exerting the most significant pressure on the FTSE 100. Luxury retailers also experienced declines on the day, with Burberry and Watches of Switzerland Group at the forefront of the losses, recording decreases 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 experienced a rise of 0.4%. Among other movers, WH Smith surged 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.