Wall Street led a global markets bloodbath on Thursday as countries around the world reeled from President Donald Trump's trade war, while the White House insisted the US economy will emerge victorious.

The S&P 500 dropped 4.8 percent in its biggest loss since 2020. The tech-rich Nasdaq plummeted 6.0 percent and the Dow Jones 4.0 percent.

Shock waves also tore through markets in Asia and Europe in the wake of Trump's Wednesday announcement, while foreign leaders signaled readiness to negotiate but also threatened counter-tariffs.

Trump slapped 10 percent 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 percent 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.

Trump dismissed the turmoil, insisting to reporters as he left for a weekend at his Florida golf resorts, that stocks will "boom."

The 78-year-old president 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.

"It's what is expected," he 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." (AFP)