China and the US continue to clash as both countries impose shipping fees, unsettling global investors. President Trump attempted to calm fears on social media, saying, “Don’t worry about China, it will all be fine!”
European stock markets opened lower on Tuesday, following a Wall Street rally driven by Trump’s reassurance about ties with Beijing. Despite his words, investors remain cautious as the world’s two biggest economies escalate their trade dispute.
Both sides began charging fees on each other’s ships on Tuesday after a US probe into China’s shipbuilding dominance. Washington placed a $50-per-tonne (€43.27) fee on Chinese vessels in American ports, while Beijing imposed a 400-yuan (€48.65) levy per tonne, with gradual increases planned.
Beijing also sanctioned five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, asserting its maritime influence.
Although trade negotiations remain uncertain, Trump said he might still meet Chinese leader Xi Jinping later this month during a regional summit.
Over the weekend, Trump threatened China with 100% tariffs before softening his tone online, calling Xi “highly respected” and claiming both countries want to avoid economic depression. He insisted the US aims to help, not harm, China.
European Markets Struggle Amid Broader Economic Worries
Investors in Europe stayed wary as France’s new government under Sébastien Lecornu prepared to address parliament at 15:00 CEST. Lecornu will try to stabilize France by presenting a budget to curb the country’s large deficit.
In the UK, rising unemployment — up to 4.8% for the three months to August — is fuelling anxiety over economic health.
By midday, major European indexes dropped. London’s FTSE 100 fell 0.38% to 9,406.64, Paris’s CAC 40 dropped 0.76% to 7,874.20, and Frankfurt’s DAX declined 0.87% to 24,176.42.
The STOXX 600 benchmark fell 0.71%, and Madrid’s IBEX 35 lost 0.2% to 15,511.00.
EasyJet shares climbed after rumours of a potential takeover by shipping giant MSC. Despite MSC denying any talks, EasyJet’s stock rose nearly 5% by midday.
“Investors now wonder who else might pursue EasyJet,” said Dan Coatsworth, head of markets at AJ Bell. “That’s why the shares remain strong despite MSC’s denial.”
Across the Atlantic, Dow Jones futures dropped 0.8%, S&P 500 futures fell 0.94%, and Nasdaq futures declined 1.23%. Rare earth companies surged as the trade conflict deepened. Critical Metals jumped over 33% in premarket trading, USA Rare Earth rose 9%, and MP Materials gained 6%.
Commodities and Cryptocurrencies React to Global Uncertainty
The euro and British pound weakened against the dollar, while the Japanese yen strengthened.
Oil prices plunged. US crude fell over 2% to $58.25, and Brent dropped below $62, losing around 2%.
Gold and silver soared as investors turned to safe assets. Gold hit $4,156.80, up 0.58%. Silver futures briefly topped $52 before slipping to $50.
Cryptocurrencies fell sharply. By noon in Europe, Bitcoin dropped 3.5% to $111,801, while Ethereum slid 6.4% to $4,006.49.
Global markets now look ahead to earnings reports under the shadow of an AI-driven valuation bubble. Analysts warn that tech stocks appear overpriced after rapid gains outpacing profits.
Fears of a repeat of the 2000 dot-com crash are rising. Major firms including JPMorgan Chase, Johnson & Johnson, and United Airlines will report results this week, offering clues to the market’s direction.
