Markets in Asia and Europe are spared by the escalation of the trade war

The trade war between the United States and China has intensified. Markets are largely sidelined.

The Chinese stock market opened Tuesday at its lowest level in four years, but recovered to close higher. The main European indices made slight progress in the noon exchanges. US stock indexes were also on the rise – an indication that investors around the world had already taken into account President Trump's promise to impose $ 200 billion more tariffs on Chinese products as soon as next week.

"Markets have long been waiting for Trump tariffs," said Carl B. Weinberg, chief international economist at High Frequency Economics in White Plains, New York. "The official price announcement yesterday did not surprise the market players. "

Although disruptive, the cost of tariffs is relatively small compared to the size of the US and Chinese economies.

"Even at this scale, these rates are small potatoes with savings of nearly $ 20 trillion each," Weinberg said in an email.

In Hong Kong, stocks rose 0.6%. In Shanghai, where the largest Chinese companies are listed, equities rose 1.8%. But gains came after a 1.1% drop on Monday, which pushed inventories to their lowest level since November 2014. Other Asian markets were optimistic, with stocks in Japan up 1.4 %. The Korean Stock Exchange gained 0.3%.

Inventories rose in Paris, Frankfurt and London, and the euro gained against the dollar.

The trade war is clearly bad for some big European companies, especially car manufacturers like BMW and Daimler. They manufacture in China, the United States and Europe, and tariffs hinder the movement of vehicles and components. But Trump's interest in China could ease tensions with the continent, and Europe could even take advantage of tensions between China and the United States, said Gabriel Felbermayr, director of the Ifo Center for International Economics. in Munich.

"The period of Trump's attack against all trading partners at the same time has, hopefully, already ended," said Felbermayr. As long as Trump's anger remains focused on Beijing, he added, "Europe is relatively safe."

The tariff threat comes as China struggles with a slowdown in the economy and a bear market that is hurting its financial health. Chinese stocks reached Tuesday their lowest level in four years, but rebounded on banks, reflecting confidence in the ability of the Chinese economy to absorb the impact of the levies. Shanghai's benchmark index closed up nearly 2%.

The tariffs could reduce the country's annual economic growth by 0.7 percentage points, said Fang Xinghai, vice president of China's securities regulator. But, he added, the Chinese government has monetary and fiscal tools to cushion any impact. Mr. Fang was speaking Tuesday morning at a World Economic Forum conference.

Analysts have expressed concern that Beijing may retaliate against the US by weakening the value of the Chinese currency against the dollar. This would make Chinese products cheaper and more competitive for foreign buyers, reducing the higher costs that US tariffs would impose.

The renminbi has weakened more than 7% against the dollar this year, an unusual shift for a currency that is not freely traded and is carefully managed by Beijing. The daily exchange rate is set by the Chinese central bank and trades in a narrow range against the dollar.

On Tuesday, the renminbi was slightly weaker against the dollar. In Hong Kong, which operates outside the tight financial controls of mainland China, the Chinese currency was also weaker.