The Chinese government said it would impose additional 34 percent tariffs on all imports of US goods, making it the first major nation to unveil retaliatory measures.

Despite the market turmoil, Trump insisted that "my policies will never change" and urged the US Federal Reserve to cut interest rates.

Wall Street stocks dropped sharply in morning trading, with the blue-chip Dow falling below 39,000 points briefly for the first time since August.

The S&P 500 also briefly exceeded its Thursday loss -- its largest drop since the Covid pandemic in 2020.

"Sentiment is so fragile right now," Chris Beauchamp, chief market analyst at online trading platform IG, told AFP.

"Investors are firmly in the 'get me to cash now' phase, on fears that other nations will follow China's lead, and of course that the US president will respond to China's tariffs with even more charges," he said.

"This trade war is like nothing we've seen for years, perhaps decades."

European markets ended the day sharply lower, with Frankfurt and London sinking nearly five percent.

With Powell set to speak publicly, Trump posted on his Truth Social account that "This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates."

XTB research director Kathleen Brooks said that with Trump doubling down on his tariffs despite feeling the heat from the market selloff "leaves the Fed to do the heavy lifting and try to calm financial markets".

But Powell said he expected the current economic uncertainty would decline, setting Wall Street stocks down further.

The falls came despite data showing the US economy added 228,000 jobs last month, much higher than analysts expected.

"There's no question that the trade war is fuelling the current selloff, but the big question is if and when it will start to impact the economy in a meaningful way," said eToro US investment analyst Bret Kenwell.

The jobs report "again showed that we have yet to see a significant spike in jobless claims, and if the most recent payrolls report avoids a large revision lower like we saw for February, it bodes well for the US economy," he added.

The dollar rebounded against the euro and pound, having fallen sharply Thursday on fears of a recession in the United States.

But oil futures plummeted around seven percent, having already plunged some six to seven percent Thursday on the prospect of weaker demand.

News that OPEC+ had unexpectedly hiked crude supply more than planned added to the heavy selling.

The price of copper -- a vital component for energy storage, electric vehicles, solar panels and wind turbines -- tumbled more than five percent.

Beijing on Friday also imposed export controls on seven rare earth elements, its commerce ministry said, including gadolinium -- commonly used in MRIs -- and yttrium, utilised in consumer electronics.

"Another jolt of fear has shot through markets as China's threat of retaliation has materialised," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"The big concern is that this is a sign of a sharp escalation of the tariff war which will have major implications for the global economy," she said.

- Key figures around 1530 GMT -

West Texas Intermediate: DOWN 7.0 percent at $62.27 per barrel

Brent North Sea Crude: DOWN 5.6 percent at $66.23 per barrel

New York - Dow: DOWN 3.3 percent at 39,194.40 points

New York - S&P 500: DOWN 3.9 percent at 5,188.63

New York - Nasdaq Composite: DOWN 3.8 percent at 15,915.69

Frankfurt - DAX: DOWN 5.0 percent at 20,641.72 (close)

Paris - CAC 40: DOWN 4.3 percent at 7,274.95 (close)

London - FTSE 100: DOWN 5.0 percent at 8,054.98 (close)

Tokyo - Nikkei 225: DOWN 2.8 percent at 33,780.58 (close)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.0986 from $1.1052 on Thursday

Pound/dollar: DOWN at $1.2953 from $1.2968

Dollar/yen: DOWN at 145.82 yen from 145.99 yen

Euro/pound: UP at 84.99 pence from 84.34 pence

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