Global markets plunged after China retaliated against U.S. tariffs, deepening fears of a drawn-out trade war and economic fallout.

Stock market turmoil has deepened as China retaliated against tariffs announced by U.S. President Donald Trump, heightening fears of a prolonged trade war and wider damage to the global economy.

China imposed a 34 percent tariff on U.S. goods, marking its most significant countermeasure so far.

By the close of trading on Friday, the Dow Jones Industrial Average had dropped 5.5 percent, the Nasdaq Composite was down 5.8 percent, and the S&P 500 had fallen nearly 6 percent.

In total, the three major indices recorded their worst two-day slump since March 2020, when the COVID-19 pandemic first shook the global economy.

The sharp declines, which echoed losses in markets worldwide, came after Trump’s Wednesday announcement of sweeping reciprocal tariffs on nearly all U.S. trading partners. These included a baseline 10 percent tariff on most countries and targeted tariffs as high as 50 percent on more than 60 nations.

Trump, who has vowed to reshape the global trade order, dismissed concerns over market turbulence, instead highlighting the strength of the U.S. labor market.

Analysts say the tariffs, some of which are set to take effect as early as Saturday, amount to the largest tax increase in the United States since 1968.

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