‘Liberation day’ as it happened: US hits major trading partners with steep ‘reciprocal’ tariffs; Stocks tumble as Trump takes world to brink of full-blown trade war

Luxury goods companies are expected to raise prices in the US following Donald Trump’s tariffs on imports from the EU and Switzerland, where most luxury products are made.

Analysts at UBS estimate that luxury brands would need to raise US prices by 6 per cent, or face a 7 per cent fall in earnings before interest and taxes.

Zuzanna Pusz at UBS said US luxury consumers were likely to shop abroad rather than in the US, given the “widening regional price gaps in addition to the VAT refund in Europe”.

The US is the luxury sector’s biggest market, generating on average 20 per cent of sales, according to Barclays, with Ferragamo, LVMH and Cartier owner Richemont the most exposed.

AP Møller-Maersk, the world’s second-largest container shipping group, said it expected to see a rush in short-term air freight orders to beat the imposition of US tariffs.

The Danish shipping giant, whose shares fell by more than 7 per cent on Thursday, added that the tariffs were not “good news for global economy, stability, and trade”.

It said that it had seen customers accelerating imports to the US ahead of the tariffs announcement as well as securing additional storage space.

“Moving forward, until they have a clearer picture, we generally expect customers to be a bit more cautious about their inventory levels,” it added.

Irish foreign and trade minister Simon Harris urged the EU not to use its “bazooka” to retaliate against US President Donald Trump’s tariffs.

He told RTÉ radio the use of the anti-coercion instrument targeting services would be “an extraordinarily escalatory measure — not something I think we should be reaching for”.

Use of the ACI could hit the US tech industry based in Ireland but Harris said he was “not detecting any majority view” among EU partners to use it at this stage.

Trump on Wednesday did not apply tariffs to pharmaceuticals but Harris said he understood they would be announced at a later date. Ireland should use this time lag to “continue to engage”, he said.

South Korea’s acting president Han Duck-soo said on Thursday that the US reciprocal tariffs risked a “big burden” to Asia’s fourth-largest economy and vowed to announce emergency support measures for the auto sector by next week, according to state-run Yonhap News.

Han also said the country’s trade minister planned to visit Washington as soon as possible for negotiations, after Donald Trump imposed 26 per cent tariffs on South Korea’s exports to the US.

Earlier in the day, finance minister Choi Sang-mok vowed to deploy all possible means to stabilise financial markets if volatility becomes excessive.

The benchmark stock index Kospi closed down 0.76 per cent, with automaker Hyundai down 1.2 per cent and chipmaker Samsung Electronics off 2 per cent.

Wine and spirits producers on both sides of the Atlantic responded with dismay to President Donald Trump’s sweeping 20 per cent tariffs on European products, with a French business group estimating the levies would knock €1.6bn off EU-wide exports.

Half of that impact would be borne by France, according to FEVS, the Federation of France’s wine and spirits exporters.

“These setbacks will have a huge impact on employment and the economy,” FEVS said.

The sector had already been under pressure from softer global demand and an ongoing trade dispute between the EU and Beijing over cognac.

Chris Swonger, chief executive at the Distilled Spirits Council of the United States, urged Trump to broker deals “that get us back to fair and reciprocal zero-for-zero tariffs for spirits products”.

Global stocks fell and government bonds rallied on Thursday after Donald Trump’s sweeping new tariffs left the world on the brink of a full-blown trade war.

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The benchmark Stoxx Europe 600 index was down 1.3 per cent by mid-morning trading, after a steeper fall at the open, as investors flocked to haven assets including Treasuries and German Bunds. Futures tracking the S&P 500 and the Nasdaq were down 2.8 per cent and 3 per cent, respectively.

The dollar was down 1.6 per cent against a basket of its peers as investors fretted about the impact on the US economy and priced for more Federal Reserve rate cuts.

Trump’s aggressive trade policy, which he has put at the heart of this second term in the White House, had already hit stocks in the first quarter, but investors said the new set of tariffs announced on Wednesday were steeper than feared.

“It’s worse than expected, there’s no sugar coating it,” said Zhikai Chen, head of global emerging market equities at BNP Paribas Asset Management.

Trump said a levy of 10 per cent would apply to nearly all US imports from April 5, and that dozens of countries, including China, would be subject to further “reciprocal” tariffs from April 9.

In a sign of investors’ concern over the potential damage to the US economy from tariffs, traders began betting on the chance of a fourth quarter-point interest rate cut this year from the Federal Reserve, according to levels implied by swaps markets. Until Wednesday, investors had priced in three cuts.

US economic growth will drop sharply to 1 per cent this year, according to rating agency Scope, down from its previous forecast of 2.7 per cent, as a result of Donald Trump’s tariffs.

Scope warned that Trump’s “reciprocal tariffs” will “increase inflation, slow economic growth, and lead to disruption of global supply chains”. The European agency also trimmed its forecast for 2026 US GDP growth to a range of 1.5 to 2 per cent, down from its previous forecast of 2.2 per cent.

It added, however, that the “probability of sudden changes in US trade policy also add a significant degree of uncertainty” to economic projections.

The announced US tariffs were higher than what Goldman Sachs economists had expected.

They estimate that the announcements imply a weighted average tariff of 18 per cent, about 3 percentage points higher than the US bank had built in into its forecasts, they said in a note to clients.

They said the long list of exemptions including those for energy products, pharmaceuticals, and semiconductors, which affect imports worth $1.1tn, imply that the new tariffs only cover two-thirds of all US imports.

The bank warns the exemptions may only exist “because additional sectoral tariffs look likely, which will add to the overall effective tariff rate when they take effect, likely later this year”.

Greece’s finance minister Kyriakos Pierrakakis said “the Greek economy will withstand the challenges ahead” but warned of an unpredictable fallout from the US’s return to protectionist trade policies.

Speaking in parliament, he said the move marked a “historic shift” in global economic norms and a sharp break from the EU’s founding principles that could trigger multiple rounds of global escalation.

“We support free trade — no one benefits from economic war,” he said. While the full impact remains unclear, Pierrakakis stressed that Greece would help shape a united European response.

“With planning and responsibility,” he added, “the Greek economy will withstand the challenges ahead.”

More than 60 of Europe’s leading industrialists have condemned the US tariffs, warning that they will have “an intensely disruptive effect on the prosperity of citizens, companies and the global economy”.

The European Round Table for Industry — made up of the bosses of companies such as Vodafone, BMW, Inditex and Novo Nordisk — said the consequences would resonate across all industries.

Jean-François van Boxmeer, chair of the ERT and of Vodafone, said US President Donald Trump’s move “risks undoing a lot of industrial co-operation, and the resulting uncertainty will disrupt business . . . and harm workers and consumers in the EU”.

Germany’s largest union has called on the EU to respond “prudently” to US tariffs, to “avoid entering a spiral of reflexive countermeasures”.

Thorsten Gröger, head of IG Metall in the state of Lower Saxony, said “mainstays of the German economy”, including the automotive and mechanical engineering sectors, would face “substantial disruption” from US President Donald Trump’s tariffs.

But he warned that countermeasures “must be taken with a cool head”.

German industry is already suffering from slowing sales, higher costs and a slew of job cuts.

Ukraine’s first deputy prime minister has said a new 10 per cent US tariff on Ukrainian goods will be “difficult but not critical” for the country’s wartime economy.

“The universal US tariff will mostly affect small producers,” Yulia Svyrydenko said on Thursday. “That’s why we’re already working to secure better terms for Ukraine.”

She noted that Ukraine exported $874mn of goods to the US in 2024, while importing $3.4bn. “Ukraine has much to offer the United States as a reliable ally and partner,” she added. “Fair tariffs benefit both countries.”

Danish jewellery maker Pandora was the biggest faller in Europe on Thursday morning as investors fretted about the effect of tariffs on manufacturing facilities in hard-hit Thailand and large US sales.

Shares in the world’s largest maker of jewellery by volume fell 12 per cent on Thursday morning, their lowest level in more than a year.

Pandora has all three of its manufacturing plants in Thailand, which US President Donald Trump slapped with a 36 per cent tariff. It is building a fourth factory in Vietnam, against which Trump levied 46 per cent.

About one-third of Pandora’s $4.7bn in revenues last year came from the US.

Shares in German sportswear groups Adidas and Puma fell sharply on Thursday morning, down 11 per cent and 9 per cent respectively, after the US imposed new tariffs on key Asian manufacturing countries, sparking fears of rising production costs and weaker consumer demand in western markets.

Vietnam, a major sourcing hub for both brands, was hit with a 46 per cent tariff. The country accounted for 27 per cent of Adidas’s total sourcing volume in 2024 and 30 per cent of Puma’s sourcing volumes in 2023.

Both companies had previously warned that global trade tensions could weigh on performance and especially reduced direct exports from China to the US.

Financial and consumer goods stocks slumped in morning trade in Europe after President Donald Trump’s tariffs on the EU sparked fears of an economic slowdown and a hit to corporate earnings.

UBS fell 4.4 per cent, Standard Chartered lost 7.9 per cent and Commerzbank dropped 6.7 per cent on fears that slower economic growth could push interest rates lower, crimping bank profits.

Adidas, the German sports goods manufacturer, lost 9.1 per cent while French luxury goods maker LVMH lost 3.4 per cent and Danish jewellery maker Pandora shed 11.3 per cent after the US hit the EU with a 20 per cent tariff on exports. The US is the EU’s largest export market.

Italy has urged Europe to engage in “constructive negotiations” with the US to prevent an escalating trade war and persuade the Trump administration to roll back its 20 per cent tariff on European imports.

“A pragmatic approach, based on dialogue, is needed. We need a constructive negotiation, with a straight back, that takes into account US concerns but protects the sacrosanct European interests,” foreign minister Antonio Tajani wrote in a social media post.

Spain’s economy minister similarly called for a “negotiated solution” to Donald Trump’s barrage of tariffs.

“If there’s no room for negotiation, we will have to respond to protect the interests of our consumers, our businesses and our industry,” Carlos Cuerpo told Radio Nacional de España.

Germany’s finance minister said he expected a “strong response” from the EU.

“It would be naive to think that if we just sit there and let this happen . . . so I’m expecting a strong response by the European Union,” Jörg Kukies told BBC World Service, adding that the door to negotiations remained open.

Germany’s export-oriented economy, which has been stagnating in the past few years, is particularly vulnerable to Donald Trump’s punitive trade measures on goods and services from Europe. The US was Germany’s biggest trading partner in 2024, according to the statistics office.

On Thursday the German industry trade association said it supported the European Commission’s plan to use “its own instruments” to respond with “determination” while standing ready to cut a deal with the Trump administration.

Makers of European spirits such as cognac, brandy and vodka face a significant financial hit from the planned 20 per cent US tariff on EU goods, according to analysis by Jefferies.

Canadian whisky and tequila from Mexico will continue to enjoy tariff-free trade with the US, which plays in spirit group Diageo’s favour. About 50 per cent of the group’s US portfolio is imported from Mexico or Canada.

“Whilst proposed tariffs are a negative and second order effects on macro could drive further volatility, the worst-case scenario . . . does not appear to have been crystallised,” wrote Jefferies analyst Ed Mundy.

Belgium supports a “firm and proportionate” European response to Trump’s tariffs, Belgian foreign minister Maxime Prévot said.

“We will react quickly and assertively, proportionately and unitedly, with a strategy that protects our economy,” Prévot said.

“It would indeed be inappropriate to take measures that could harm us more than the United States. But by playing with matches, the United States will end up getting burned. The knock-on effect for their own economic dynamics seems to be neglected by Washington.”

Traders are now pricing in three or four quarter-point interest rate cuts this year from the Federal Reserve to shore up the US economy, up from three on Wednesday, according to levels implied by swaps markets.

“Even if tariffs are ultimately reduced by year-end, the near-term shock and associated uncertainty is likely to drive a near-term slowdown in the US economy and reduce full-year 2025 growth to closer to or below 1 per cent,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Clothing and footwear companies are likely to be hit hard by the new tariff regime for south-east Asian countries.

Many retailers have in recent years moved sourcing away from China to Vietnam, Cambodia and Indonesia – with reciprocal tariffs now between 42 and 49 per cent for the latter three.

Last year, factories in Vietnam, Indonesia and China manufactured about 50 per cent, 27 per cent and 18 per cent of Nike’s shoes, analysts at Investec said. Adidas sourced 27 per cent in Vietnam, 19 per cent Indonesia and 16 per cent in China, where tariffs also remain high.

Given most apparel and footwear retailers source their goods from many of the same countries, the industry is likely to be affected as a whole, Investec said.

The EU needs to see what the “political” consequences of US tariffs on the bloc will be, its defence commissioner said on Thursday, reiterating that Brussels still believed in the “strategic importance” of US relations.

“Definitely, this is what the European Union was not wishing to happen. We did everything to avoid that development,” Andrius Kubilius said ahead of a meeting of EU defence ministers in Brussels.

“Now we shall see what the consequences are both from an economical and political point of view. We are keeping our strong belief that the transatlantic relation is of strategic importance,” he told reporters.

Vietnam’s export growth will slow “substantially” and it may struggle to hit its 8 per cent GDP growth target as it is among the countries “worst-hit” by US tariff rises, according to analysts at Jefferies.

In a note on Thursday, they noted that major technology manufacturers including Intel and Samsung and apparel makers such as Nike would be hit.

They added that Vietnam retained a relative tariff advantage with a lower rate than China, but predicted that new capacity could be added in lower-cost countries such as India, Indonesia and African states.

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French President Emmanuel Macron will hold a meeting on Thursday afternoon of representatives from sectors affected by new tariffs, the Élysée said.

The EU including France faces US tariffs of at least 20 per cent, according to the measures outlined by President Donald Trump on Wednesday. Key parts of the French economy including the luxury, wine and car sectors are among those set to be hit by the measures.

The meeting at the Élysée Palace will begin at 4pm in Paris.

India’s gems are expected to be among the country’s hardest hit exports after Donald Trump’s latest tariff salvo.

India’s Gem and Jewellery Export Promotion Council said it expected “challenges in sustaining India’s current export volume of $10bn to the US” in the short run, and urged New Delhi to make progress on a trade agreement with Washington for “securing long-term interest of the sector”.

Gems, pharmaceuticals and electronics are India’s three biggest exports to the US. While pharmaceuticals were exempted and electronics received relatively light tariffs, all precious stones sold from India to the US face a 26 per cent levy.

Base metals prices slid on Thursday as the impact of tariffs reverberated through global markets.

The London benchmark prices of copper and aluminium — both of which the US imports significant volumes of — were down 2 per cent in early trading.

Copper stocks in Comex warehouses in the US were at the highest level since 2019, with traders having stockpiled in recent weeks. Large volumes of copper left the global network of London Metal Exchange warehouses in March.

Malaysia is not considering retaliatory tariffs on the US after the Trump administration imposed a tariff rate of 24 per cent on the south-east Asian country.

“We acknowledge that President Trump’s tariff hike poses a significant challenge to global trade dynamics. While respecting such sovereign decisions, Malaysia strongly believes in constructive engagement for mutually beneficial economic relations,” the Ministry of Investment, Trade and Industry said in a statement on Thursday.

The ministry is actively engaging with the US authorities to seek solutions “that will uphold the spirit of free and fair trade”, it said.

To mitigate the impact of tariffs Malaysia is working to expand export markets by prioritising high-growth regions, leveraging existing free trade agreements and striking new partnerships within the Asean bloc, the ministry said.

Chinese indices and bond yields were down after midday in Asia, with technology companies in Hong Kong dragging the Hang Seng index lower.

The Hang Seng was down 1.6 per cent in the Asian afternoon, with Alibaba, BYD and Tencent down 5.2 per cent, 2 per cent and 1.8 per cent respectively.

China’s CSI 300 index of Shenzhen- and Shanghai-listed companies was down 0.7 per cent, with electronics component manufacturer Luxshare down 9.9 per cent, white goods maker Midea down 2.6 per cent and Foxconn Industrial Internet down 3.4 per cent.

Chinese sovereign bond yields also fell, following months of state intervention to support them. The two-year CGB yield fell 0.08 percentage points to 1.46 per cent, while the 10-year yield was down 0.08 percentage points at 1.79 per cent.

Taiwan’s Executive Yuan, the country’s cabinet, called Washington’s decision to impose reciprocal tariffs on the grounds of currency manipulation and non-tariff barriers “totally unreasonable and highly regrettable” and said it would lodge a formal protest with the US.

The government said a 32 per cent tax rate was unfair to Taiwan as its calculation method was unclear and failed to reflect the high degree of complementarity in bilateral trade.

The statement contrasts with Taipei’s previous efforts not to criticise the Trump administration for fear of undermining crucial security support from Washington against China.

Indian stocks fell at the market open on Thursday after US President Donald Trump slapped the country with a 26 per cent reciprocal tariff on its exports.

The benchmark Nifty 50 was down 0.8 per cent, while the rupee also declined 0.3 per cent against the dollar. The yield on India’s 10-year government bonds fell to its lowest level in more than three years.

However, the Nifty Pharma index gained 3 per cent as listed Indian drugmakers rallied following a tariff exemption on pharmaceuticals. Overall, Madhavi Arora, chief economist at Emkay Global Financial Services in Mumbai, said Indian exports could drop by as much as $33bn, or 0.9 per cent of GDP.

China’s exports will suffer not only from Donald Trump’s new tariffs on the country’s goods but also from the shockwaves on the global economy that will lessen demand in other markets, Morgan Stanley analysts said.

The analysts, led by the investment bank’s chief China economist Robin Xing, said China would probably need to announce additional stimulus measures on top of those already announced during this year’s meeting of the rubber stamp parliament, the National People’s Congress.

Chinese exports would suffer a shock greater than under the first Trump administration in 2018-19, Xing said in a note, and it would be more difficult this time to negotiate a satisfactory deal to de-escalate the situation.

He said there was “downside risk” to Morgan Stanley’s GDP forecast of 4.5 per cent for 2025 for China.

“Factory Asia” has been hit hard by the US tariffs, according to Citi economists, in a reference to the Asia-Pacific manufacturing countries including China, Vietnam and Thailand.

“The harder decoupling of Factory Asia vs. the US would likely necessitate more greater policy support in China including allowing more renminbi depreciation”, they wrote in a note published on Thursday.

The analysts also noted that the Trump administration targeted some of the lowest income countries in Asia, with high tariffs on Laos, Cambodia, Sri Lanka and Bangladesh — “even though they are potential sources of low cost/China+1 substitutes and hardly provide any opportunities for US job reshoring”, they wrote.

A spokesperson for India’s electronics industry, a major exporter to the US, on Thursday said the country had “emerged favourably placed” from Donald Trump’s first round of reciprocal tariff announcements vis-à-vis other countries that supply the global industry.

With China and Vietnam facing combined tariffs of up to 54 per cent to 79 per cent, India would enjoy a “valuable near-term window of export competitiveness”, Pankaj Mohindroo, chair of the India Cellular & Electronics Association, told the Financial Times.

However, Mohindroo said, the “true long-term inflection point” for India’s electronics industry would rest on the successful conclusion of a bilateral trade agreement, the first tranche of which India and the US have vowed to agree by autumn.

The EU is “prepared to respond” to 20 per cent US tariffs on all its exports, European Commission president Ursula von der Leyen said on Thursday, while emphasising the bloc first wished to negotiate.

The global economy will “massively suffer” from the “universal tariffs” Donald Trump announced on Wednesday, von der Leyen said.

While Brussels had a plan for countermeasures, it preferred a negotiated settlement “to remove the remaining barriers to transatlantic trade”.

She also said the EU would protect itself from dumped goods forced out of the US market.

Washington’s higher tariffs on China are set to compound deflationary pressures in the world’s second-largest economy, according to ING.

China’s consumer price index was negative in February and has hovered close to zero for years as policymakers struggle to boost consumer spending.

“Products which once could’ve been sold in the US market will now need to be redirected elsewhere — or absorbed by domestic demand,” said ING’s chief China economist Lynn Song. “Ultimately, tariff barriers seem likely to exacerbate overcapacity issues.”

The new 34 per cent levies on China could prompt more easing, according to ING. Beijing has set an inflation target of 2 per cent this year — its lowest in decades — which ING says it will struggle to reach.

China weakened the renminbi to its lowest level since January 17 in its first policy response to the new US tariffs levied on its exports.

The People’s Bank of China set the daily “fix” for the onshore renminbi at Rmb7.19 to the dollar, after holding the currency steady at Rmb7.17 for much of 2025 in an attempt to show exchange rate stability.

“This fix shows they are yielding to the market pressure”, said Ding Shuang, chief economist for greater China and north Asia at Standard Chartered, who cautioned that the authorities had not weakened the currency in line with tariffs like in the first Trump term.

“But 7.19 is still quite benign . . . I don’t think they will use the exchange rate [to soften the impact of tariffs], it would cause a race of competitive devaluation”, he added.

Japan’s chief government spokesperson Yoshimasa Hayashi expressed “serious concern” over the US decision to impose 24 per cent tariffs on its imports, and said that Japan had made a request to Washington that the levy be reversed.

Hayashi warned that the tariffs would cause a “big negative impact” on the global economy. A separate government statement described the measures as “extremely regrettable”.

The chief cabinet secretary’s comments echoed those of Japan’s trade minister, Yoji Muto, who had spoken to Howard Lutnick earlier in the day and warned the US commerce secretary that the tariff decision would make it harder for Japan to invest directly in the US. Japan is the largest provider of direct investment into the US.

Indian pharmaceuticals producers, among the country’s biggest exporters, on Thursday welcomed the Trump administration’s decision to exempt them from Washington’s round of reciprocal tariffs.

The Indian Pharmaceutical Alliance said that the industry remained “a cornerstone” of India’s partnership with the US, and highlighted the role the industry played in “ensuring a steady supply of affordable medicines”.

India, one of the world’s biggest drug producers, exported more than $27bn of pharmaceuticals globally in the 2023-24 financial year, nearly $9bn of which went to its biggest overseas market, the US.

The Trump administration hit India with a reciprocal tariff of 26 per cent overnight. New Delhi and Washington are negotiating a bilateral trade agreement, the first tranche of which is due to be concluded by autumn, and say they want to boost their mutual trade to $500bn by 2030, up from less than $200bn now.

Donald Trump’s sweeping tariff regime has created a “nightmare” scenario for carmakers, according to a Shanghai-based analyst.

“The global auto value chain is notoriously complex — brakes from Mexico, steel from China, final assembly in the Carolinas,” said Chris Liu, a Shanghai-based senior analyst at consultancy Omdia, adding that more than half of the 487 models currently sold in the US are imported.

“It’s a planning nightmare . . . it creates a moving target for supply chain strategy, capital investment and market forecasting.”

China’s leading makers of electric vehicles have already been largely shut out of the US market by existing tariffs and other measures.

However, Chinese battery manufacturers CATL and BYD are entrenched partners of global carmakers that “rely heavily” on Chinese raw materials such as lithium, graphite, and rare earth elements, Liu noted.

New Zealand’s Prime Minister Christopher Luxon said on Thursday that the imposition of a 10 per cent baseline tariff by the Trump administration was “not ideal” but that he was more concerned about the impact on the global economy if other countries react.

“The bigger impact will be the wash of a tit-for-tat trader war,” he told reporters.

Luxon reiterated that, like Australia, New Zealand would not introduce retaliatory tariffs on US imports. However, he said his government would look to hold talks with the US government over the suggestion that New Zealand already imposes a 20 per cent tariff on US imports, which has been denied by ministers.

Bitcoin has recovered some ground after sharply falling immediately after the tariff announcement.

The price of the coin has recovered about 1.1 per cent to $83,726 per token on Thursday morning, but remains down more than 10 per cent since the start of the year.

Ethereum, the second most widely used cryptocurrency, also recovered slightly to $1,830, but remains down about 45 per cent year to date.

Donald Trump’s additional tariffs on China bring the total charges on the country’s goods to 65 per cent — exceeding his threats during the election and making a “hard decoupling” between the two economies more likely, Citi said.

The investment bank’s analysts said the effective tariff rate would reach 65 per cent once the latest reciprocal tariffs, the end of “de minimis” exemptions, fentanyl tariffs and previously existing tariffs were included.

“The hard decoupling scenario . . . appears to be playing out,” the analysts said.

Trump’s tariffs could shave 2.4 percentage points from China’s GDP growth before considering any offsetting measures by Beijing, they said.

China could try to mitigate the effects on exports and GDP growth through exchange rate depreciation, further monetary easing and a fiscal injection into the economy, they said.

China’s commerce ministry on Thursday warned it would retaliate against US President Donald Trump’s latest addition of added 34 per cent tariffs on the country.

The Trump administration’s latest tariffs on China will take the total added tariffs on China to 54 per cent since the start of Trump’s second term, closing in on his campaign pledge of a 60 per cent tariff hike for China.

“History has shown that raising tariffs will not resolve the US’s own problems,” said a commerce ministry spokesperson.

“The Chinese side firmly opposes this and will resolutely take countermeasures to protect its own rights and interests,” the spokesperson said.

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Global stocks fell and government bonds rallied on Thursday after Donald Trump’s sweeping new tariffs left the global economy on the brink of a full-blown trade war.

Futures for the S&P 500 and Nasdaq were down 2.8 per cent and 3.3 per cent, respectively. Japan’s benchmark Topix index was down 3.8 per cent while European futures pointed lower.

Trump announced a universal tariff of 10 per cent on almost all imports. Some countries were also hit with higher “reciprocal” tariffs.

“It’s worse than expected, there’s no sugar coating it,” said Zhikai Chen, head of global emerging market equities at BNP Paribas Asset Management.

Investors rotated into haven assets. Japan’s yen rose 1.4 per cent to ¥147.1 per dollar and gold prices touched a record high of $3,167 a troy ounce. The US 10-year Treasury yield fell 0.13 percentage points to 4.1 per cent. Japanese 10-year government bond yields dropped 0.12 percentage points to 1.3 per cent. Bond yields move inversely to prices.

The US dollar shed 0.8 per cent against a basket of key trading partners.