Shares of major European carmakers dropped sharply on Monday morning after United States President Donald Trump announced plans to impose tariffs on several European countries over Greenland.

Europe’s Stoxx Automobiles and Parts index was down about two per cent at 8:41 a.m. London time (3:41 a.m. ET).

Germany’s Volkswagen, BMW, and Mercedes-Benz Group saw early losses of 2.6 per cent to 4.4 per cent, while Ferrari shares in Milan fell roughly two per cent.

Milan-listed shares of Stellantis, owner of brands including Jeep, Dodge, Fiat, Chrysler, and Peugeot, were down 2.1 per cent.

The declines followed Trump’s Saturday announcement that he plans to impose 10 per cent tariffs on the United Kingdom, Denmark, Norway, Sweden, France, Germany, the Netherlands, and Finland by February 1, as part of his efforts to bring Greenland, a self-governing Danish territory, under U.S. control.

Trump said the tariffs on these countries would increase to 25 per cent starting June 1.

European political leaders are set to hold emergency talks in the coming days to decide on their response.

The automotive industry is seen as especially exposed to such levies, given its highly globalized supply chains and significant manufacturing presence in North America.