Trump says China “panicked”

President Donald Trump goaded China on Friday, saying the US rival had "panicked" after it announced counter-tariffs in response to his global trade war.

"China played it wrong, they panicked -- the one thing they cannot afford to do!" Trump posted on Truth Social, writing the entire message in his trademark all-caps.

China announced 34 percent tariffs on US imports on Friday, the first major economy to fire back against President Donald Trump's swingeing 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 could include retaliatory tariffs or other measures that could escalate a trade war that has raised fears of recession.

China -- one of the United States's top trading partners -- was first, announcing that tariffs of 34 percent 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.

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 percent, its biggest drop since the Covid pandemic in 2020.

In Europe, Frankfurt sank by five percent after midday on Friday while Paris shed more than four percent and London was down almost 3.8 percent.

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

Trump vowed to stick to his policies, saying: "To many investors coming into the United States and investing massive amounts of money, my policies will never change.”

"This is a great time to get rich, richer than ever before,” he added on his Truth Social account.