China and the United States continue to clash as both sides impose new shipping fees, alarming investors. President Trump tried to calm markets with a social media post, saying, “Don’t worry about China, it will all be fine!”
European stock markets opened lower on Tuesday despite Monday’s Wall Street rally after Trump’s remarks about relations with Beijing. Investor confidence remains weak as the two largest economies battle over trade.
Both nations began charging fees on each other’s ships on Tuesday after Washington’s probe into China’s dominance in shipbuilding. The US set a $50 (€43.27) per tonne fee on Chinese vessels in American ports. China responded with a 400-yuan (€48.65) per tonne charge, which will increase over time.
Beijing also sanctioned five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean to strengthen its maritime control.
Although trade talks remain uncertain, Trump said he may still meet Chinese President Xi Jinping later this month during a regional summit.
Over the weekend, Trump threatened China with 100% tariffs before reassuring followers 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 Decline as Political and Economic Pressures Build
European investors remain cautious ahead of French Prime Minister Sébastien Lecornu’s address to parliament at 15:00 CEST. Lecornu plans to present a budget aimed at reducing France’s heavy deficit and restoring political stability.
In the UK, unemployment rose to 4.8% in the three months to August, raising new doubts about the economy’s strength.
By midday, major European indexes were down. London’s FTSE 100 slipped 0.38% to 9,406.64, Paris’s CAC 40 fell 0.76% to 7,874.20, and Frankfurt’s DAX dropped 0.87% to 24,176.42. The STOXX 600 lost 0.71%, while Madrid’s IBEX 35 slid 0.2% to 15,511.00.
EasyJet shares climbed nearly 5% after speculation about a takeover by shipping giant MSC. Despite MSC denying any interest, the airline’s shares stayed high.
“Investors are now speculating about potential buyers for EasyJet,” said Dan Coatsworth, head of markets at AJ Bell. “That’s why the stock remains elevated even after MSC’s denial.”
Market Volatility Spreads Across Sectors and Regions
Across the Atlantic, Dow Jones futures fell 0.8%, S&P 500 futures declined 0.94%, and Nasdaq futures dropped 1.23%.
Meanwhile, US rare earth companies surged as trade tensions deepened. Critical Metals rose over 33% in premarket trading, USA Rare Earth gained 9%, and MP Materials advanced 6%.
Currencies moved sharply. The euro and British pound weakened against the US dollar, while the Japanese yen gained strength.
Oil prices plunged. US benchmark crude dropped over 2% to $58.25, and Brent crude slipped below $62, losing around 2%.
Gold and silver surged as investors turned to safe-haven assets. Gold climbed 0.58% to $4,156.80, while silver briefly hit a record above $52 before easing to $50.
Cryptocurrencies declined sharply. Before noon in Europe, Bitcoin fell 3.5% to $111,801, and Ethereum lost 6.4%, trading at $4,006.49.
Global markets now brace for earnings reports amid fears of an AI-driven bubble. Critics argue that soaring valuations have outpaced corporate profits, echoing warnings from the 2000 dot-com crash.
JPMorgan Chase, Johnson & Johnson, and United Airlines will release financial updates this week, with investors watching closely for signs of stability.
