China and the US escalate tensions by imposing new shipping fees, alarming global investors. The confrontation widens despite President Trump’s social media claim: “Don’t worry about China, it will all be fine!”
European markets opened lower on Tuesday, even after Wall Street’s rally on Monday, when President Trump tried to reassure investors about ties with Beijing.
Investor confidence remains weak as the two biggest economies clash over trade control. Both countries will start charging each other’s ships on Tuesday, following a US probe into China’s rising dominance in global shipbuilding.
Washington plans to charge $50 per tonne (€43.27) of cargo on Chinese vessels docking in US ports. Beijing will counter with a 400-yuan (€48.65) per tonne levy, set to increase steadily.
Beijing also imposed sanctions on five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, asserting its growing maritime influence.
Trade negotiations between the two powers remain uncertain. Trump said he might still meet Chinese leader Xi Jinping later this month during a regional summit.
Over the weekend, Trump threatened 100% tariffs on Chinese goods, then softened his stance online. He wrote, “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 Markets React to Political and Economic Pressures
Beyond the trade dispute, European investors stay cautious as France’s new prime minister, Sébastien Lecornu, prepares to address parliament at 15:00 CEST. He plans to stabilize the government by passing a budget to cut France’s heavy deficit.
In Britain, rising unemployment — now 4.8% in the three months to August — increases anxiety about the country’s economic outlook.
By midday, the FTSE 100 in London dropped 0.38% to 9,406.64. The CAC 40 in Paris slid 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 slipped 0.2% to 15,511.00.
EasyJet shares climbed nearly 5% after rumours of a possible takeover by shipping group MSC, even though MSC denied involvement.
“Investors are reconsidering who might buy EasyJet, which explains why shares remain high,” said Dan Coatsworth, head of markets at AJ Bell.
Global Investors Shift as Commodities and Currencies Fluctuate
Across the Atlantic, Dow Jones futures dropped 0.8%, S&P 500 futures fell 0.94%, and Nasdaq futures lost 1.23%. US rare earth companies surged amid the trade fight. Critical Metals rose over 33%, USA Rare Earth gained 9%, and MP Materials increased 6%.
The euro and the British pound weakened against the US dollar, while the Japanese yen gained slightly.
Oil prices declined sharply. US benchmark crude fell over 2% to $58.25, and Brent slipped below $62, down about 2%.
Investors moved toward safe-haven assets. Gold climbed 0.58% to $4,156.80, and silver futures hit a record above $52 before easing to around $50.
Cryptocurrencies tumbled. By noon, Bitcoin dropped 3.5% to $111,801, and Ethereum fell 6.4% to $4,006.49.
Markets Brace for Key Earnings Amid AI Bubble Fears
Global sentiment remains tense amid warnings of an AI-driven stock bubble. Analysts argue that tech valuations have risen far faster than profits.
Critics say the US market looks overpriced and fear a repeat of the 2000 dot-com crash. Investors now await major earnings reports. JPMorgan Chase, Johnson & Johnson, and United Airlines will release updates this week, shaping expectations for the next market phase.
