DAX Slumps on Renewed US-EU Trade Tensions
FRANKFURT, 20 January 2026 – Germany’s benchmark DAX 40 index closed at its lowest level in two weeks on Monday, pressured by renewed fears of a transatlantic trade war after US President Trump announced new tariffs on imports from several European nations, including Germany.
The Tariff Threat
In a move that rattled European markets, US President Donald Trump announced on 19 January 2026 that the United States would impose a 10% tariff on all imports from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, effective from 1 February. The announcement stated the tariffs could rise to 25% and would remain in place “until an agreement is reached for the complete and total purchase of Greenland.” The threat triggered a broad sell-off across European equity markets.
Market Reaction
The DAX 40 index fell approximately 1.3% to close at 24,960 points on Monday, 19 January, marking its lowest close since 6 January. The decline was led by significant losses in consumer and automotive stocks. Sportswear giant Adidas was the worst performer, dropping 5.07%. Biotechnology firm Qiagen fell 4.09%, and Porsche Automobil declined 3.89%. The losses were partially offset by gains in Bayer, which surged 7.71%, and defence contractor Rheinmetall, which rose 1.67%.
On Tuesday, 20 January, the index showed tentative signs of stabilisation, trading at 24,976 points in early European trading, a gain of 17 points or 0.07% from the previous close.
Key Facts & Market Data
| Metric | Detail |
|---|---|
| DAX Close (19 Jan 2026) | 24,960 points (-1.33%) |
| DAX Level (20 Jan 2026) | 24,976 points (+0.07%) |
| 2026 Year-to-Date Performance | +1.91% |
| All-Time High | 25,584.60 points (January 2026) |
| Top Loser (19 Jan) | Adidas: -5.07% |
| Top Gainer (19 Jan) | Bayer: +7.71% |
| US Tariff Announcement | 10% on imports from 8 European nations from 1 Feb; may rise to 25%. |
Outlook and Analysis
The sudden escalation in trade rhetoric has introduced significant near-term uncertainty for German exporters. According to forecasts from Trading Economics, the DAX 40 is expected to trade at approximately 24,691.83 points by the end of the first quarter of 2026, with a further decline to around 22,441.08 points projected over the next 12 months. These models reflect heightened macroeconomic risks. The index’s performance in January had previously been strong, reaching a record high, but the new geopolitical headwinds have sharply reversed sentiment.
Frequently Asked Questions
What triggered the DAX sell-off on 19 January 2026?
The primary catalyst was an announcement by US President Donald Trump imposing new tariffs of 10% on imports from several European countries, including Germany. The tariffs are scheduled to begin on 1 February 2026 and could increase to 25%, creating uncertainty for European exporters.
Which German companies were most affected?
Consumer-facing and export-oriented firms led the declines. Adidas shares fell over 5%, while Porsche and Qiagen also saw significant drops. In contrast, shares in Bayer and Rheinmetall gained ground.
What is the historical context for the DAX?
The DAX 40 is Germany’s premier blue-chip stock index, comprising the 40 largest and most liquid German companies trading on the Frankfurt Stock Exchange. It reached a record high of 25,584.60 points earlier in January 2026 before the recent pullback.