The Dollar’s recent recovery was fleeting on Tuesday, as renewed tensions in US-China trade relations weakened risk appetite, prompting investors to seek safety in currencies like the Yen and Swiss Franc.

Just as markets were buoyed by US President Donald Trump’s more conciliatory stance on Chinese tariffs and the prospect of a meeting with his Chinese counterpart later this month, Tuesday’s events highlighted that the relationship between the two countries remains fragile.

Beijing announced countermeasures targeting five US-linked subsidiaries of South Korea’s Hanwha Ocean and separately launched an investigation into the impact of a US Section 301 probe on its domestic shipping sector.

Heightening tensions further, the United States and China will begin imposing additional port fees on Tuesday for ocean shipping companies transporting goods ranging from holiday toys to crude oil, Reuters reports.

This caused the Dollar to fall sharply, erasing the gains it had made earlier in the session.

The Euro gained 0.14% against a softer Dollar, reaching $1.1585, while the British Pound rose 0.12% to $1.3351.

Meanwhile, the Australian Dollar, commonly seen as a gauge of risk sentiment, dropped sharply, last trading 0.63% lower at $0.6475. The New Zealand Dollar also declined, falling 0.5% to $0.5697.

Beijing said that it seeks negotiations and a relationship grounded in mutual respect and fairness.

The current US-China dynamic isn’t temporary or cyclical; it reflects a structural reality of the new geoeconomic landscape.

China’s commerce ministry stated on Tuesday that it had notified the US in advance about the rare earth export controls announced last week, and that working-level discussions between the two countries occurred on Monday.

Meanwhile, safe-haven currencies such as the Yen and Swiss Franc continued to climb steadily.

The Swiss Franc rose 0.2% against the Dollar, reaching 0.8027, while the Yen recovered from earlier losses, climbing 0.3% to 151.86.