Relations between Washington and Beijing keep deteriorating as both countries impose new fees on each other’s ships. The escalating trade fight alarms global investors. President Donald Trump tried to calm fears online, writing, “Don’t worry about China, it will all be fine!”
European markets opened lower on Tuesday, ignoring Wall Street’s Monday rally after Trump’s reassurance about US-China relations. Investor confidence remains fragile as the world’s two biggest economies battle over trade influence.
Both nations began applying ship fees on Tuesday. Washington introduced a $50 (€43.27) per tonne charge on Chinese vessels in US ports, while Beijing responded with a 400 yuan (€48.65) fee per tonne that will rise gradually.
China also imposed sanctions on five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, reinforcing its maritime power ambitions.
Trump said he might still meet Chinese leader Xi Jinping later this month during a regional summit, though the status of trade talks remains uncertain.
Over the weekend, Trump first threatened China with 100% tariffs, then softened his tone online, calling Xi “highly respected” and saying both nations want to avoid economic depression.
European Markets Slip as Political and Economic Worries Mount
European investors also face domestic uncertainty as France’s new government, led by Sébastien Lecornu, prepares to address parliament at 15:00 CEST. Lecornu aims to restore political stability and pass a budget to reduce France’s heavy deficit.
In the UK, rising unemployment — up to 4.8% in the three months to August — fuels concern over the nation’s economic outlook.
By midday, major European indexes showed declines. The FTSE 100 in London dropped 0.38% to 9,406.64, the CAC 40 in Paris fell 0.76% to 7,874.20, and Frankfurt’s DAX slid 0.87% to 24,176.42. The STOXX 600 fell 0.71%, while Madrid’s IBEX 35 slipped 0.2% to 15,511.00.
EasyJet shares rose nearly 5% after rumours of a potential takeover by shipping group MSC. Although MSC denied the speculation, investors continued to buy the stock. “Investors now wonder who else might want EasyJet,” said Dan Coatsworth, head of markets at AJ Bell.
Global Investors Brace for Volatility Amid Tech and Commodity Swings
Across the Atlantic, US futures fell. Dow Jones futures declined 0.8%, S&P 500 futures lost 0.94%, and Nasdaq futures dropped 1.23%. Meanwhile, US rare earth companies surged as the trade conflict deepened. Critical Metals jumped 33% in premarket trading, USA Rare Earth climbed 9%, and MP Materials gained 6%.
Currency markets also shifted. The euro and the British pound weakened against the dollar, while the yen strengthened.
Oil prices tumbled sharply. US crude dropped over 2% to $58.25, and Brent crude slipped below $62, down around 2%.
Precious metals rallied as investors sought safety. Gold rose 0.58% to $4,156.80, while silver futures reached a record above $52 before easing to $50.
Cryptocurrencies faced heavy losses. Bitcoin fell 3.5% to $111,801, and Ethereum dropped 6.4% to $4,006.49.
Market sentiment remains uneasy as fears of an AI-driven bubble grow. Analysts say US tech valuations look overstretched compared to company profits, reviving memories of the 2000 dot-com crash.
Investors now await earnings reports from major firms, including JPMorgan Chase, Johnson & Johnson, and United Airlines, to gauge the market’s next direction.
