Germany’s DAX fell 0.4 percent to 11,256 while the CAC 40 in France slipped 0.5 percent to 5,141. Britain’s FTSE 100 sank 0.7 percent to 7,168.
With U.S. markets preparing to reopen after the President’s Day holiday, the future contract for the Dow Jones Industrial Average lost 0.4 percent to 25,798 and that for the S&P 500 also slipped 0.3 percent to 2,767.
Vice Premier Liu He, China’s economy czar, was due to arrive in Washington on Thursday, China’s state media reported, after two days of preliminary talks by lower-level officials.
A truce between the U.S. and China on increased American tariffs on Chinese good expires March 2, leaving the U.S. free to more than double its import taxes on $200 billion in Chinese goods.
U.S. President Donald Trump has said he may hold off on these if the country was close to a deal with China.
Analysts said much is riding on the outcome of the trade talks after an inconclusive end to an earlier round in Beijing last week.
“Without sounding like a damp squib, there is now a vast amount of optimism baked into currency, stock and energy market prices globally and precisely zero concrete detail,” Jeffrey Halley, senior market analyst for OANDA, said in a commentary.
“The unwind, should no deal be struck, could be very ugly,” he said.
The U.S. is wrangling over trade with many nations. On Monday, the European Union warned that the bloc will hold back on a commitment to buy more American soybeans and liquefied gas if European cars are hit with punitive tariffs.
ASIA’S DAY: The Shanghai Composite index edged 0.1 percent higher to 2,755.65, while Japan’s Nikkei 225 edged 0.1 percent higher to 21,302.65. Australia’s S&P ASX 200 climbed 0.3 percent to 6,106.90 and the Hang Seng in Hong Kong gave up 0.4 percent to 28,228.13. South Korea’s Kospi lost 0.2 percent to 2,205.63. Shares were mostly higher in Southeast Asia.
CHINA AUTO SALES: China’s auto sales fell for an eighth month in January, extending a painful decline for the biggest global market as demand cooled amid a slowing economy and tariffs standoff with the U.S. Purchases of sedans, SUVs and minivans fell 15 percent from a year earlier to just over 2 million vehicles, according to an industry group, the China Association of Automobile Manufacturers.
ENERGY: U.S. crude added 48 cents to $56.07 per barrel in electronic trading on the New York Mercantile Exchange. It gained $1.19 on Monday. Brent crude, used to price international oils, lost 16 cents to $66.34 per barrel.
CURRENCIES: The dollar strengthened to 110.77 yen from 110.60 yen on Monday. The euro slipped to $1.1280 from $1.1309.