Stock markets plunge after Trump reignites trade war risk with threat of 50% tax on EU goods

Stock markets have dropped sharply after US president Donald Trump reignited fears of a trade war by threatening to impose high tariffs on the EU and smartphone giant Apple.

European shares fell 1.7 per cent, the US S&P 500 fell 1.1 per cent in early trading and the tech-heavy Nasdaq fell 1.6 per cent. The Dow Jones Industrial Average fell 408 points, or 1 per cent.