Global Stocks Fall as US Treasury Secretary Blames China for Economic ‘Sabotage’
Global stock markets fell on Tuesday after the US Treasury Secretary, Scott Bessent, accused China of deliberately undermining the world economy, escalating tensions between the world’s two largest economies.
In Europe, the DAX in Frankfurt dropped 0.9%, while the CAC 40 in Paris slipped 0.7%, erasing Monday’s brief rebound. The FTSE 100 was down 0.1% in London.
Bessent told the Financial Times that China’s sweeping new controls on rare earth exports were designed to hurt global growth. “This is a sign of how weak their economy is, and they want to pull everybody else down with them,” he said. “Maybe there is some Leninist business model where hurting your customers is a good idea – but they are the largest supplier to the world. If they want to slow down the global economy, they will be hurt the most.”
Asian markets also tumbled, with the Nikkei 225 in Tokyo plunging 2.6% as traders returned from a holiday to renewed trade fears and domestic political turmoil.
Investors sought safety in precious metals, sending gold to a new record high and silver to levels unseen since 1980. The London Bullion Market Association (LBMA) said it was “actively monitoring” the tightness in the silver market.
Assets have been whipsawed in recent days after Donald Trump threatened 100% tariffs on Chinese goods in response to Beijing’s export restrictions. While Trump later struck a more conciliatory tone, both countries introduced new port fees on shipping firms this week, further straining trade ties.
In the UK, sentiment was also dampened by data showing unemployment rising to a four-year high and wage growth slowing to 4.7%, the weakest in three years. Adjusted for inflation, real pay rose just £4 a week.
