European shares declined on Tuesday, as mounting unease over U.S. President Donald Trump’s tariff threat over Greenland continued into a second session.

The pan-European STOXX 600 fell 0.7% by 0803 GMT, a day after logging its steepest intraday decline in two months. 

Trump threatened to implement a wave of increasing tariffs from February 1 on eight European countries until the U.S. is allowed to buy Greenland, fuelling fears of a renewed trade war. 

While some analysts remain sceptical, investors are on edge as the U.S. president has shown little signs of softening his rhetoric. 

Corporate earnings and policy signals from the World Economic Forum in Davos are also expected to steer market sentiment this week. 

French automaker Renault Group’s shares rose 1.6% after it said sales volumes rose 3.2% in 2025. Oil major TotalEnergies was flat, as the company said it expects lower oil and liquefied natural gas sales in the fourth quarter of 2025, but stronger margins on refining fuels.

Shares of luxury group LVMH and Pernod Ricard dropped 1.4% and 0.3%, respectively, after Trump threatened to slap a 200% tariff on French wines and champagnes to push French President Emmanuel Macron to join his Board of Peace initiative.