China and the US continue to clash as both governments impose fees on each other’s ships, alarming investors. The trade dispute deepens despite President Trump’s social media assurance: “Don’t worry about China, it will all be fine!”
European markets opened lower on Tuesday, even after Wall Street’s Monday rally, which followed Trump’s attempt to calm markets. Investor confidence remains fragile as the world’s two largest economies tighten trade measures.
Both countries began charging vessel fees on Tuesday. Washington introduced a $50 (€43.27) per tonne fee on Chinese ships entering US ports, while Beijing imposed a 400 yuan (€48.65) per tonne levy that will rise gradually.
Beijing also sanctioned five US-linked subsidiaries of South Korea’s Hanwha Ocean to reinforce its maritime control.
Trade talks between China and the US remain uncertain, though Trump said he may still meet Xi Jinping later this month during a regional summit.
Over the weekend, Trump first threatened 100% tariffs on Chinese goods, then posted: “Don’t worry about China, it will all be fine! President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The USA wants to help China, not hurt it!!!”
European investors also stayed cautious ahead of French Prime Minister Sébastien Lecornu’s address to parliament at 15:00 CEST, where he will present a budget to reduce France’s high deficit and stabilize politics.
In Britain, rising unemployment — up to 4.8% in the three months to August — increased fears about the UK economy’s strength.
European and US Markets React to Trade Tensions
By midday in Europe, key indexes traded lower. The FTSE 100 fell 0.38% to 9,406.64, the CAC 40 dropped 0.76% to 7,874.20, and the DAX slid 0.87% to 24,176.42.
The STOXX 600 lost 0.71%, while Spain’s IBEX 35 slipped 0.2% to 15,511.00.
EasyJet shares rose after rumours of a takeover by shipping giant MSC. Although MSC denied involvement, the airline’s shares still gained nearly 5% by midday.
“Investors now speculate about who could buy EasyJet, keeping shares up despite MSC’s denial,” said Dan Coatsworth, head of markets at AJ Bell.
Across the Atlantic, US futures pointed downward. Dow Jones futures dropped 0.8%, S&P 500 futures fell 0.94%, and Nasdaq futures lost 1.23%.
Meanwhile, US rare earth companies surged as trade tensions intensified. Critical Metals jumped over 33% in premarket trading, USA Rare Earth rose 9%, and MP Materials climbed 6%.
The euro and the British pound weakened against the US dollar, while the Japanese yen gained ground.
Oil prices plunged as US crude dropped over 2% to $58.25, and Brent crude slipped below $62, losing nearly 2%.
Gold and silver prices soared as investors turned to safe havens. Gold rose 0.58% to $4,156.80, while silver briefly hit a record above $52 before easing to around $50.
Cryptocurrencies slumped sharply. Before noon in Europe, Bitcoin fell 3.5% to $111,801, and Ethereum lost 6.4%, trading at $4,006.49.
Global Investors Brace for Earnings Amid Market Uncertainty
Global sentiment remains tense as fears grow that the artificial intelligence boom could deflate. Sky-high tech valuations are driving warnings of an overheated market.
Critics argue that US equities now look overpriced as stock prices outpace profit growth. Memories of the 2000 dot-com crash heighten caution ahead of earnings season.
Major companies including JPMorgan Chase, Johnson & Johnson, and United Airlines will report results this week, providing crucial insight into market direction.
