San Francisco Frontiers - Trump goads China after Beijing retaliates in global trade war

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

For a second day, markets plunged, wiping vast sums off investment and retirement portfolios alike.

Wall Street opened with steep selloffs, both the Dow Jones and S&P 500 losing close to three percent. Frankfurt and London sank more than four percent, while Tokyo's Nikkei closed 2.8 percent down.

Trump, who unveiled his barrage of import duties against countries all over the world on Wednesday, was unrepentant, posting that "my policies will never change."

"This is a great time to get rich, richer than ever before," he wrote.

The 78-year-old Republican, who was spending a long weekend golfing at his course in Palm Beach, Florida, is banking on the theory that the sheer might of the world's biggest economy will force foreign companies to manufacture on US soil, rather than continue to import goods.

However, China responded toughly, announcing its own new 34 percent tariffs on US imports starting April 10.

Beijing said it would sue the United States at the World Trade Organization and also restrict export of rare earth elements used in high-end medical and electronics technology.

Other big US trading partners have so far held back as they digest the unfolding international standoff and fears of recession.

EU trade chief Maros Sefcovic was due to speak with US counterparts on Friday.

Sefcovic said the EU, which Trump hit with a 20 percent tariff, will act in "a calm, carefully phased, unified way" and allow time for talks. However, he also warned the bloc "won't stand idly by, should we be unable to reach a fair deal".

- EU examines options -

France and Germany have said the 27-nation 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 strongб 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, Prime Minister Shigeru Ishiba called for a "calm-headed" approach after Trump slapped 24 percent tariffs on Japanese-made goods.

- Cars clash -

Separate US tariffs of 25 percent 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 on 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.

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.

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