Trump ordered tariffs of 25% on exports from Canada and Mexico to the US. Chinese-made goods will face a 10% levy, in addition to existing tariffs.

The moves, which Trump has tied to concerns about the flow of illegal drugs and migrants, into the US, target the United States’ three largest trading partners and are expected to lead to major disruption in some of the world’s biggest economies.

Canada and Mexico have said they will hit back with retaliatory tariffs while China promised “corresponding countermeasures” and vowed to challenge Trump’s move at the World Trade Organization.

Many are bracing for wider tensions, after Trump said on Sunday that he would “definitely” impose tariffs on the EU, although he said while the UK was “out of line”, a deal could be worked out.

On the Dow, which tracks 30 high-profile companies meant to be representative of the economy, Nike and Apple, which both rely on China for manufacturing, were among the hardest hit, falling about 3%.

Elsewhere, carmakers such as Tesla and General Motors also saw share prices drop.

In Japan, Toyota shares fell 5% and Honda sank 7.2%, while in Europe shares in Stellantis – whose brands include Chrysler, Citroen, Fiat, Jeep and Peugeot – were down 7% and VW dropped roughly 6%.

Shares in drinks maker Diageo – which exports tequila from Mexico to the US – fell 3.8%.