Stock markets dived again on Friday as Donald Trump faced a barrage of criticism for launching a $60bn (£42bn) package of tariffs on Chinese goods, sparking fears of a global trade war.

In a day of condemnations, EU leaders meeting in Brussels accused Mr Trump of “putting a gun” to Europe’s head, while the director general of the WTO in Geneva warned that the US ­administration’s move had “jeopardised” a still-fragile global recovery.

On Wall Street, the benchmark Dow Jones index ended down 1.8pc at 23,533.2, which puts it back in correction territory some 11pc below the record high it reached in January.

The dollar fell towards a one-month low against major currencies while the Vix volatility index, known as the “fear gauge”, jumped above 25, its highest since the market turmoil at the start of the year.

Analysts said fears of a trade war and geopolitical instability had sent investors scrambling for safe havens such as gold, which hit a one month high, and the Japanese yen, which is likely to benefit from a dispute.