TOKYO (AP) — Global markets saw mixed trading on Wednesday as investors weighed the consequences of ongoing tariff decisions between the United States and China.

France's CAC 40 dipped 0.3% to 7,881.94 in early session trading, while Germany’s DAX slid 0.5% to 7,881.94. In the UK, the FTSE 100 edged down 0.2% to 8,558.31. U.S. markets were also poised for a weaker open, with Dow futures declining 0.2% to 44,620.00, while S&P 500 futures lost 0.5% at 6,034.25.

Earlier in Asia, Japan’s Nikkei 225 managed to erase early losses and closed nearly flat, inching up by less than 0.1% to settle at 38,831.48.

Notably in the Japanese market, shares of Honda Motor Co. surged by 8.2% following media reports suggesting that discussions over a joint holding company with Nissan Motor Corp. were faltering. Meanwhile, Nissan’s stock saw a sharp drop of 4.9%.

Australia’s S&P/ASX 200 advanced 0.5% to 8,416.90. Over in China, the Hang Seng Index fell 0.9% to 20,597.09, while the Shanghai Composite slipped 0.7% to 3,229.49.

South Korea’s Kospi gained 1.1% to reach 2,509.27, as bargain hunters snapped up stocks after recent declines, drawing confidence from an overnight rally on Wall Street.

Some analysts suggest that tariffs on China are a separate matter from other trade policies pursued by Trump. They argue that Trump may be inclined to maintain tariffs on China for an extended period, as he did during his first term, to create further economic separation between the U.S. and its geopolitical rival.

The Trump administration is moving ahead with a 10% tariff on U.S. imports from China. In retaliation, China announced its own countermeasures on Tuesday, including new tariffs on some American goods and an antitrust probe into Google.

China’s fresh tariffs include a 15% levy on U.S. coal and liquefied natural gas, as well as a 10% tax on crude oil, agricultural machinery, and large-engine cars sourced from the U.S. However, these measures will not take effect until Monday, providing a window for possible negotiations between Trump and Chinese President Xi Jinping.

“Trade tensions haven’t reached a breaking point yet, but they are simmering dangerously close, and dismissing them outright comes with significant risks,” Stephen Innes, managing partner at SPI Asset Management, cautioned.

On Monday, Trump agreed to postpone tariffs on imports from Canada and Mexico for a month. Some traders hold out hope that he will reconsider escalating tariffs, as a prolonged trade war could bring turbulence to Wall Street—a market Trump has previously used as a benchmark for his administration’s success.

However, the possibility of an escalating trade conflict remains, and analysts warn that market volatility could persist given the unpredictability of Trump’s trade policies.

In the energy sector, U.S. benchmark crude oil dropped by 40 cents to $72.30 per barrel. Meanwhile, Brent crude, the global benchmark, declined 46 cents to $75.74 per barrel.

In currency markets, the U.S. dollar weakened against the Japanese yen, slipping to 152.95 yen from 154.30 yen. The euro inched higher, trading at $1.0404 compared to $1.0382 in the previous session.