Beijing, China - China announced 34% tariffs on US imports on Friday, the first major economy to fire back and match President Donald Trump's devastating new levies in an escalating global trade war that sent markets deep into the red.

Countries and companies alike weighed their options and the EU readied for talks with US officials. Potential responses to Trump's shocking "Liberation Day" announcement could include retaliatory tariffs or other measures that could escalate a trade war that has raised fears of recession.

China – one of the US' top trading partners – was first, announcing that tariffs of 34% on all American imports would come into effect from April 10 and saying it would file a suit at the World Trade Organization (WTO) over the tariffs.

It also said it would impose export controls on a number of rare earth elements used in medical technology and consumer electronics.

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In an apparent response to Beijing's move, Trump wrote on Truth Social: "CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!"

Asian and European stock markets added to their losses after a bloodbath on Thursday that sent New York's broad-based S&P 500 index down 4.8%, its biggest drop since the Covid pandemic in 2020.

In Europe, Frankfurt sank by 5% after midday on Friday, while Paris shed more than 4% and London was down almost 3.8%.

Tokyo's Nikkei index closed 2.8% lower, with Prime Minister Shigeru Ishiba describing Trump's tariffs as a "national crisis".

Trump dismissed the turmoil on Thursday, insisting to reporters as he left for a weekend at his Florida golf resort that stocks will "boom".

Trump announced 10% import duties on all nations, due to kick in on Saturday, and far higher levies on imports from dozens of specific countries taking effect next week.

Countries have slammed the tariffs but, except for China, have so far withheld retaliatory measures, instead offering talks with the US.