China and the United States deepen their trade conflict by imposing new ship fees, alarming global investors. President Trump insists on social media, “Don’t worry about China, it will all be fine!” despite growing market unease.
European markets opened lower on Tuesday, even after a Wall Street rally on Monday driven by Trump’s optimistic tone about relations with Beijing.
Investor confidence remains weak as the two largest economies clash over trade dominance. Both nations start imposing fees on each other’s vessels on Tuesday after a US probe into China’s shipbuilding strength. Washington applies a $50 (€43.27) per tonne charge on Chinese ships entering American ports, while Beijing responds with a 400 yuan (€48.65) per tonne levy, set to increase steadily.
China also sanctioned five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, asserting greater control over global maritime trade.
Although trade talks between Washington and Beijing remain uncertain, 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, later softening his message online. “Highly respected President Xi just had a bad moment,” he wrote. “The USA wants to help China, not hurt it!”
European investors also face uncertainty as France’s new Prime Minister Sébastien Lecornu prepares to address parliament at 15:00 CEST. He will present a budget plan to restore political calm and reduce France’s growing deficit.
In the UK, rising unemployment — up to 4.8% in the three months to August — intensifies fears about the country’s economic health.
European and US Markets Turn Red
By midday in Europe, major stock indexes continued to decline. London’s FTSE 100 dropped 0.38% to 9,406.64, Paris’s CAC 40 slid 0.76% to 7,874.20, and Frankfurt’s DAX fell 0.87% to 24,176.42.
The European STOXX 600 benchmark lost 0.71%, while Madrid’s IBEX 35 slipped 0.2% to 15,511.00.
In corporate updates, EasyJet shares surged after speculation of a takeover by shipping giant MSC. Although MSC denied the rumour, the airline’s stock still climbed nearly 5% by midday.
“Investors will now wonder who else might want EasyJet,” said Dan Coatsworth, head of markets at AJ Bell. “That explains why shares remain higher even after MSC’s denial.”
Across the Atlantic, Dow Jones futures dropped 0.8%, S&P 500 futures lost 0.94%, and Nasdaq futures sank 1.23%. Meanwhile, US rare earth producers saw sharp gains amid escalating trade tensions. Critical Metals soared over 33% in premarket trading, USA Rare Earth rose 9%, and MP Materials added 6%.
Currency markets also shifted. The euro and the pound weakened against the dollar, while the yen strengthened slightly.
Oil prices fell sharply, with US crude sliding more than 2% to $58.25 and Brent crude dipping below $62.
Gold and silver prices jumped as investors sought safety. Gold climbed 0.58% to $4,156.80, while silver futures briefly hit a record above $52 before easing to $50.
Cryptocurrencies slumped. Bitcoin fell 3.5% to $111,801, while Ethereum tumbled 6.4% to $4,006.49 before noon in Europe.
Markets Brace for Earnings and Tech Corrections
Global sentiment remains fragile amid fears that an AI-driven market bubble may soon burst. Tech valuations have surged far beyond company profits in recent months.
Analysts warn that the US stock market looks overvalued after rapid price growth outpaced earnings. Many fear a repeat of the 2000 dot-com collapse as the next earnings season begins.
This week, major US firms including JPMorgan Chase, Johnson & Johnson, and United Airlines will release quarterly results, setting the tone for investors worldwide.
