Markets extended a global sell-off as countries around the world reeled from US President Donald Trump's trade war, but the White House insisted the American economy will emerge victorious.
Shockwaves tore through markets in the United States, Europe and Asia after Mr Trump's tariff bombshell, as foreign leaders signalled readiness to negotiate but also threatened counter-tariffs.
The S&P 500 dropped 4.8% in its biggest loss since 2020. The tech-rich Nasdaq plummeted 6.0% and the Dow Jones 4.0%.
Japan's key Nikkei 225 index was down more than 3% in afternoon trade today, with Prime Minister Shigeru Ishiba describing Mr Trump's tariffs as a "national crisis".
Mr Trump slapped 10% import duties on all nations and far higher levies on imports from dozens of specific countries - including top trade partners China and the European Union.
Separate tariffs of 25% on all foreign-made cars also went into effect, 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.
Watch: Donald Trump says market response to tariffs was expected
Mr Trump dismissed the turmoil, insisting to reporters as he left for a weekend at his Florida golf resort that stocks will "boom".
Vice President JD Vance, in an interview with Newsmax, also played down the market turbulence.
"I frankly thought in some ways it could be worse in the markets, because this is a big transition," Mr Vance said.
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'Trust Donald Trump'
Mr 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.
"I think it's going very well. It was an operation. Like when a patient gets operated on, and it's a big thing. I said this works exactly the way it is"
"It's what is expected," the 78-year-old president said of the market reaction. "The patient was very sick. The economy had a lot of problems."
"It went through an operation. It's going to be a booming economy. It's going to be amazing."
Watch: Donald Trump says UK happy about tariff treatment
Amid howls of protest abroad and from even 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," Mr Lutnick said on CNN.
Mr Trump reserved some of the heaviest blows for what he called "nations that treat us badly".
That included an additional 34% on goods from China - bringing the new added tariff rate there to 54%.
The figure for the European Union was 20%, and 24% on Japan.
China demanded the tariffs be immediately cancelled and vowed countermeasures, while France and Germany warned that the EU could hit back at US tech firms.
French President Emmanuel Macron called for suspending investment in the United States until what he called the "brutal" new tariffs had been "clarified".
IMF chief Kristalina Georgieva said the tariffs "clearly represent a significant risk to the global outlook".
She appealed to Washington and its trade partners to work "constructively" to resolve tensions and reduce uncertainty.
Gold - a safe-haven investment - hit a new record price, oil fell and the dollar slumped against other major currencies.
Global economic 'sumo wrestler'
Ngozi Okonjo-Iweala, head of the World Trade Organization, which helps manage global trading, warned the upheaval may lead to contraction of "one percent in global merchandise trade volumes this year".
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.
Mr Trump has said he would negotiate "as long as they are giving something that is good".
The 27-nation EU and other countries have sought to negotiate as they refrained from immediate retaliation.
Beijing said it was "maintaining communication" with Washington over trade issues, and EU trade chief Maroš Šefčovič planned to speak with US counterparts today.
But White House spokeswoman Karoline Leavitt told CNN earlier that the president made it clear "this is not a negotiation".
And Mr Lutnick also struck a hard line, saying, "You can't really fight with the United States."
"You're going to lose. We are the sumo wrestler of this world."
