Agencies WASHINGTON

American President Donald Trump's move to impose sweeping tariffs on US imports on allies and rivals alike sparked threats of retaliation on Thursday, intensifying a global trade war that threatens to stoke inflation and raising fears of recession.

The penalties announced on Wednesday unleashed turbulence across world markets and drew condemnation from other leaders facing the end of an era of trade liberalization that has shaped the global order for decades.

Trump said he would impose a 10% baseline tariff on all imports to the United States and higher duties on some of the country's biggest trading partners. According to Fitch Ratings, the effective U.S. import tax rate has shot up to 22% under Trump from just 2.5% in 2024, reaching levels last seen around 1910.

As investors digested the news on Thursday, stock markets in Beijing and Tokyo sank to multi-month lows. European shares were also down sharply in morning trade, with top goods exporter Germany hit hard. Wall Street futures sank as investors shed riskier assets in favour of safe-haven bonds and gold.

EU reacts President of the European Commission Ursula von der Leyen on Thursday announced that the EU was preparing to ramp up its countermeasures to protect itself from US' reciprocal tariffs, Euro News reported. The EU is "preparing for further countermeasures" to protect its interest, Von der Leyen said after US President Donald Trump announced a 20 per cent levies on European goods, urging the US to "move from confrontation to negotiation", as per Euro News.

In a post on X, Von der Leyen said, "The universal tariffs announced by the US are a major blow to businesses and consumers worldwide. Europe is prepared to respond. We'll always protect our interests and values. We're also ready to engage." "We will also be watching closely what indirect effects these tariffs could have, because we cannot absorb global overcapacity nor will we accept dumping on our market," she added, as per Euro News.