President Trump said on Friday he plans to announce reciprocal tariffs on many countries next week, a major escalation of his trade war. Trump made the announcement during a meeting with visiting Japanese Prime Minister Shigeru Ishiba.

Trump did not identify which countries would be hit but suggested it would be a broad effort that could also help solve US budget problems.

He said auto tariffs remained on the table amid reports that the White House was weighing potential exemptions.

"I'll be announcing that, next week, reciprocal trade, so that we're treated evenly with other countries," Trump said. "We don't want any more, any less."

The move would fulfil Trump's campaign promise to impose tariffs on American imports equal to rates that trading partners impose on American exports.

Trump told Republican lawmakers of his plans during budget discussions at the White House on Thursday, three sources familiar with the plan told Reuters.

Trump and top aides have said they plan to use higher tariffs on foreign imports to help pay for extending Trump's 2017 tax cuts, which independent budget analysts say could add trillions of dollars to the US debt.

Increased tariffs could offset some of that cost, though they have only accounted for about 2 percent of annual revenues in recent years.

Trump announced tariffs of 25 percent on Canada and Mexico on Saturday but delayed them after a negative reaction from investors. The two largest US trading partners agreed to increase enforcement efforts at the border, a top Trump priority.

Wall Street extended losses on Friday following the Reuters report of Trump's discussion with lawmakers.

US consumer sentiment dropped to a seven-month low in February, and attitudes soured among Republicans as households took stock of what they believe will be a surge in inflation from Trump's tariffs. (Reuters)