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% on all American imports would come into effect from April 10 and saying it would file a suit at the World Trade Organisation (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 percent, its biggest drop since the Covid pandemic in 2020.

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

Tokyo’s Nikkei index closed 2.8 percent 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, with the exception of China, have so far withheld retaliatory measures, offering talks with the United States.

EU trade chief Maros Sefcovic is due to speak with US counterparts on Friday after Trump hit the 27-nation bloc with a 20% tariff.

Sefcovic said on Thursday the EU would act in “a calm, carefully phased, unified way” and allow time for talks but he also warned the bloc “won’t stand idly by, should we be unable to reach a fair deal”.

France and Germany have said the EU could respond by imposing a tax on US tech companies.

Economy Minister Eric Lombard urged French companies to show “patriotism” after President Emmanuel Macron argued it would send the wrong message if they pressed ahead with investments in the United States.

Lombard said the EU’s retaliation would not necessarily involve tit-for-tat tariffs and could use other tools, pointing to data exchange and tax as levers that could be used.

“The response can be very strong but we should not respond with exactly the same weapons the US used as, if we do, it can also have a negative effect in Europe,” he told news network BFMTV.

In Tokyo, Ishiba called for a “calm-headed” approach to negotiations with Trump, who targeted Japanese products with a 24% levy.

Local media reported that Japanese officials were attempting to organise a call between Ishiba and Trump, who held apparently friendly talks at the White House in February.

Companies were also scrambling to adapt to the new trade order.

Separate tariffs of 25% on all foreign-made cars also went into effect this week, and Canada swiftly responded with a similar levy on US imports.

Stellantis — the owner of Jeep, Chrysler and Fiat — paused production at some Canadian and Mexican assembly plants. Japanese carmaker Nissan said on Friday it would revise plans to reduce production in the United States.

The company also said it would stop selling two vehicle models in the US market that are made at a factory in Mexico.

Sweden’s Volvo Cars, owned by China’s Geely, said it would increase its production of vehicles in the United States and probably produce an additional model there.

Trump says he wants to make the United States free from reliance on foreign manufacturers, in a massive economic reshaping that he likened to a medical procedure.

Amid howls of protest abroad, and even from some of Trump’s Republicans who fear price rises at home, Commerce Secretary Howard Lutnick urged patience.

“Let Donald Trump run the global economy. He knows what he’s doing,” Lutnick said on CNN.

Republican Senator Mitch McConnell broke ranks with Trump, slamming tariffs as “bad policy”.

Preserving long-term prosperity “requires working with our allies, not against them”, McConnell said.

Ngozi Okonjo-Iweala, head of the WTO, which helps manage global trading, warned the upheaval may lead to contraction of “1% in global merchandise trade volumes this year”.

The world’s 500 richest people are seeing the biggest two-day loss ever recorded by the Bloomberg Billionaires Index as fallout from President Donald Trump’s tariff announcement continues to roil global markets. As of 12:20 p.m. in New York, billionaires on the wealth list had lost $485 billion since Thursday’s stock market open. The S&P 500 Index was down about 3.4% and the Nasdaq Composite about 4.8%, adding to the previous day’s declines.

Forbes survey of Wall Street heavyweights shows many who supported Trump’s economic promises have abandoned him – and a vast majority disapprove of the President’s economic policies.

The 50 respondents, chosen for their outsized influence, reinforced the recent market tumult. Among these Wall Street heavyweights – more than half of whom supported Trump’s economic policies as he reentered the White House in January – 72% say the Trump team’s economic plan has been ineffective, and 66% did not support his economic policies. Among those who were Trump supporters as recently as a few weeks ago, more than one-third now no longer back his economic policies, and a majority of them—54%—say he is failing in the execution of his plan.