Europe prepares response to Trump tariffs as global markets plunge

Europe's top trade official will speak with U.S. counterparts on Friday, as countries around the world figured out how to respond to President Donald Trump's tariff hammer blow that has fed fears of recession and triggered a global stock rout, reports reuters today (April 4).

Nations from Canada to China have readied retaliation in an escalating trade war after Trump raised tariff barriers to their highest level in more than a century this week, leading to a plunge in world financial markets.

In Japan, one of United States' top trading partners, Prime Minister Shigeru Ishiba said that the tariffs had created a "national crisis" as a plunge in banking shares on Friday set Tokyo's stock market on course for its worst week in years.

Investment bank JP Morgan said it now sees a 60% chance of the global economy entering recession by year end, up from 40% previously.

With European shares also heading for the biggest weekly loss in three years, the European Union's trade commissioner Maros Sefcovic will speak to U.S. counterparts.

The EU is divided on how best to respond to Trump's tariffs, including on use of its 'Anti-Coercion Instrument', which allows the bloc to retaliate against third countries that put economic pressure on EU members to change their policies.

Countries that are cautious about retaliating and thereby raising the stakes in the standoff with the U.S. include Ireland, Italy, Poland and the Scandinavian nations._Agencies.