London shares fell on Monday after 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.
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. Trump said on Saturday he would impose an additional 10% levy from Feb. 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.
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, favoring 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.
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