BEIJING/BRUSSELS/WASHINGTON  -  China and the European Union announced new trade barriers on US goods on Wednesday in response to steep duties imposed by US President Donald Trump, escalat-ing a global trade war that has hammered markets and raised the likelihood of recession.

China announced a tariff hike on US imports to 84 per cent from 34 per cent, shortly after Trump’s pu-nitive 104 per cent tariffs on Chinese imports kicked in on Wednesday, as a standoff between the world’s two largest economies showed no signs of resolution.

The EU said it would impose 25 per cent tariffs on a range of US imports in a first round of counter-measures. The 27-member bloc faces US tariffs of 20 per cent on most products and higher duties on autos and steel. Countermeasures in Canada, a close US ally and major trading partner, also took ef-fect on Wednesday.

Targeted US duties on dozens of other countries, from Japan to Madagascar, also took effect, the lat-est in a thicket of tariffs that are unwinding a global trading order that has been in place for decades. Tariffs in the world’s largest consumer market now average above 20 per cent, according to various estimates, up from 2.5% before Trump took office.

Global markets took a pummelling, with the damage spreading beyond stock markets that have seen trillions of dollars in equity evaporate over the past week. Oil prices plunged to four-year lows, while investors dumped US Treasury bonds and the dollar, which are typically seen as safe-haven assets. The damage rolled into corporate funding markets, raising the cost of borrowing for even lower-risk companies.

Japan and Canada said they would cooperate to stabilise the global financial system - a task usually taken on by the United States during times of crisis.

Trump has shrugged off the market rout and offered investors mixed signals about whether the tariffs will remain in the long term, describing them as “permanent” but also boasting that they are pressur-ing other leaders to ask for negotiations.

“BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!” he wrote on social media.

Trump has said the tariffs will help rebuild an industrial base that has withered over decades of trade liberalisation, though he says he is open to negotiating down those barriers with trading partners on a country-by-country basis. Administration officials say those talks could address foreign and military aid as well as trade barriers.

Trump has already spoken with leaders of Japan and South Korea, and a delegation from Vietnam is due to meet with US officials on Wednesday.

US officials say they will not prioritise talks with China.

China warned it had the “determination and means” to continue the fight if Trump kept hitting Chi-nese goods.

Along with the countertariffs, Beijing also imposed restrictions on 18 US companies, mostly in defense-related industries, adding to the 60 or so American firms already punished over Trump’s tariffs.