European stock markets edged higher on Monday after suffering sizable losses before the weekend, when U.S. President Donald Trump reignited tensions in the trade war with China. Trump announced plans to impose an additional 100 % tariff on Chinese goods and threatened to cancel a summit with Chinese President Xi Jinping, citing China’s export restrictions on rare‑earth minerals used in smartphones, military hardware and other products. His comments sent Asian markets lower, with Hong Kong’s Hang Seng Index falling 1.5 % and Shanghai’s Composite Index down 0.2 %.
Trump’s later Sunday statement, in which he described Xi as “respected” and said he wanted to help China, helped lift European equities modestly. “The relief rally was a response to the violent market swings seen on Friday,” said Joshua Mahony, chief market analyst at Scope Markets. The Nasdaq dropped 3.6 % on Friday amid fears of a stock‑market bubble and investor anxiety over the recent tech‑led surge. Meanwhile, the U.S. government shutdown entered its third week, adding to concerns about global economic instability.
Beijing has accused Washington of acting unfairly, with the Ministry of Commerce warning that threatening high tariffs is not an effective way to engage with China. The trade dispute, which has been ongoing for months with both sides imposing tariffs on each other’s goods, carries significant implications for the global economy. European policymakers are being cautioned not to let the U.S. and China dominate technological innovation. Nobel laureate Philippe Aghion warned that European countries must recognize the need to compete with the U.S. and China in technological leadership.
At 10:45 GMT, market indices showed modest gains: the London FTSE 100 rose 0.1 %, the Paris CAC 40 increased 0.4 %, and the Frankfurt DAX climbed 0.4 %. The euro fell to $1.1587 against the dollar, while the pound slipped to $1.3337. Brent North Sea crude and West Texas Intermediate crude rose 1.6 % and 1.8 %, respectively. Investors and economists continue to monitor the trade tensions and market fluctuations closely, awaiting further developments in the U.S.–China dispute, which is likely to shape market trends in the weeks ahead.
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