Relations between China and the US keep worsening as both governments impose new shipping fees, unsettling investors. The two nations opened another trade war front, despite President Trump’s online reassurance: “Don’t worry about China, it will all be fine!”
European markets opened lower on Tuesday, even after Wall Street’s Monday rally fueled by Trump’s calming remarks about Beijing. Investor confidence remains fragile as the world’s top two economies clash over trade control.
Both sides began imposing new ship fees on Tuesday. Washington set a $50 per tonne (€43.27) charge on Chinese ships entering US ports. Beijing responded with a 400-yuan (€48.65) fee per tonne, which will rise steadily.
China also sanctioned five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, aiming to reinforce its maritime dominance.
Although trade talks remain uncertain, Trump said he might meet Chinese leader Xi Jinping later this month during a regional summit.
Over the weekend, Trump first threatened 100% tariffs on Chinese goods before softening his stance on social media. “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!” he wrote.
European investors also remain cautious as France’s new prime minister, Sébastien Lecornu, prepares to address parliament at 15:00 CEST. Lecornu plans to present a budget aimed at stabilizing France’s high deficit.
In the UK, unemployment rose to 4.8% in the three months to August, raising concern over the nation’s economic outlook.
European Stocks Slide as Markets React
By midday in Europe, major indexes declined. London’s FTSE 100 dropped 0.38% to 9,406.64, Paris’s CAC 40 slipped 0.76% to 7,874.20, and Frankfurt’s DAX fell 0.87% to 24,176.42.
The STOXX 600 declined 0.71%, while Madrid’s IBEX 35 fell 0.2% to 15,511.00.
EasyJet shares gained nearly 5% after takeover rumors involving shipping giant MSC. Although MSC denied interest, speculation continued to drive the airline’s stock higher.
“Investors are rethinking who might buy EasyJet,” said Dan Coatsworth, head of markets at AJ Bell. “That explains why shares stay strong despite MSC’s denial.”
Across the Atlantic, Dow Jones futures fell 0.8%, S&P 500 futures lost 0.94%, and Nasdaq futures dropped 1.23%. Rare earth companies in the US gained sharply as the trade dispute deepened. Critical Metals surged 33% in premarket trading, USA Rare Earth rose 9%, and MP Materials climbed 6%.
The euro and British pound weakened against the US dollar, while the Japanese yen strengthened slightly.
Oil prices dropped sharply. US benchmark crude slid over 2% to $58.25, while Brent crude fell below $62, losing about 2%.
Gold and silver prices soared as investors sought safe assets. Gold hit $4,156.80, up 0.58%, and silver reached a record above $52 before easing to around $50.
Cryptocurrencies tumbled. Bitcoin fell 3.5% to $111,801, and Ethereum lost 6.4%, trading at $4,006.49.
Investors Brace for Earnings and Tech Valuation Risks
Global markets face rising anxiety about an AI-driven bubble as tech company valuations climb rapidly. Critics argue that US stock prices have outpaced actual corporate earnings, creating fears of another collapse similar to the 2000 dot-com crash.
Analysts say the upcoming earnings season could test investor confidence. Major firms including JPMorgan Chase, Johnson & Johnson, and United Airlines will release financial results this week, setting the tone for global markets.
