Rachel Reeves has pulled out of a planned appearance at the London Stock Exchange to celebrate a “new golden age” for the City, after Donald Trump’s threat to implement tariffs until the US is allowed to buy Greenland.

The chancellor’s withdrawal from the event, which was designed to be a celebration of business in the UK after the FTSE 100 rose above the 10,000 mark for the first time, came as markets opened down on Monday morning after the US president’s threat.

In the UK, the FTSE 100 fell 0.4% after stock markets fell overnight in Asia as investors turned to safe-haven assets such as gold and silver.

France’s Cac 40 fell by 1.6%, Germany’s Dax was down by 1.4% and Spain’s Ibex 35 fell nearly 1% in early trading.

The Treasury confirmed Reeves would not attend the event at the stock exchange in the City.

Reeves instead attended a press conference with Keir Starmer, at Downing Street on Monday morning, where the prime minister said the dispute with Trump’s US over Greenland must be resolved through “calm discussion between allies”.

The event at the exchange went ahead without Reeves, fronted by Julia Hoggett, the chief executive of the LSE, with ticker tape showering the financial hub as the market opened.

On Saturday, Trump threatened a 25% tariff on eight European countries – Denmark, Germany, France, the Netherlands, Finland, Sweden, Norway and the UK – until the US is allowed to purchase Greenland.

Trump said he would impose a 10% tariff on the eight nations beginning 1 February, “on any and all goods sent to the United States of America”, with an increase to 25% on 1 June.

“There will be hundreds of different opinions on how this will all pan out but remember that the tariffs announced on ‘liberation day’ were ultimately softened a week later,” said analysts at Deutsche Bank. “That said, as it stands the tariff threats are real, and would be economically and geopolitically damaging.”

In the US, markets will be closed on Monday for Martin Luther King Jr Day.