The Dow Jones Industrial Average plunged more than 500 points Friday after President Donald Trump issued a furious series of tweets about China and called the country's leader an 'enemy.'

The market dropped immediately after Trump said the U.S. would be 'better off' without its leading trading partner and demanded U.S. companies find an 'alternative' place from which to operate.

Trump unloaded on China hours after it announced it was imposing tariffs on $75 billion of U.S. products. The president also made time to blasting Federal Reserve Chair Jerome Powell after he failed to send a clear signal about dropping interest rates.

But the president wasn't showing signs he was sweating the major drop in the markets – sending out a mocking tweet that connected the big selloff to news that little-known Democratic candidate Seth Moulton was dropping out of the presidential race.

'The Dow is down 573 points perhaps on the news that Representative Seth Moulton, whoever that may be, has dropped out of the 2020 Presidential Race!,' Trump wrote.

Trump demanded that U.S. firms bring their companies 'HOME' and said they were 'hereby ordered' to begin seeking 'alternatives to China' – a country he has long derided for 'ripping off' the U.S.

'Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far ... better off without them,' Trump said of the world's second-largest economy and top trading partner.

China hit back at President Donald Trump in the latest volley in the growing trade war – slapping tariffs on $75 billion of U.S. products. - In this June 29, 2019, file photo, President Donald Trump, left, meets with Chinese President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka, Japan

SUDDEN DROP: The Dow dropped steeply as soon as Trump tweeted about China

Trump called Fed chair Jay Powell an 'enemy'

He continued: 'The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing ... your companies HOME and making your products in the USA.'

'I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States,' Trump said, without revealing more.

The Dow immediately sank more than 400 points. By shortly after 1 pm, it was don 500 points, or more than 2 per cent of its value.

The broader S&P 500 was also down more than 2 per cent, and the NASDAQ, which includes smaller companies, was down 2.66 per cent.

Trump also leveled additional threats related to the U.S. heroin epidemic.

'Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE ... all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop - it didn’t. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!'

Trump's tweets against China come amid continued unrest in Hong Kong. Anti-extradition bill protesters react after the police fired tear gas to disperse the demonstration at Sham Shui Po, in Hong Kong, China August 14, 2019

Trump called China an 'enemy' and compared President Xi Jinping to favorite target Fed Chair Jerome Powell

Fed chair Jay Powell

Trump's attack came after China hit back at the U.S. in the latest volley in the growing trade war Friday morning – slapping tariffs on $75 billion of U.S. products and causing an immediate drop in stock futures.

The move comes after Trump, who has defended the trade war and called himself the 'chosen one' to take on China – imposed tariffs on $300 billion of Chinese goods.

Trump has announced a planned Sept. 1 duty increase in a war over trade and technology policy that has rattled financial markets.

The move came hours before Fed Chairman Jay Powell was set to speak publicly, amid comments closely watched for any hints on interest rates.

The official Xinhua News Agency said Friday the tariffs of 10 per cent and 5 per cent take effect on two batches of goods Sept. 1 and Dec. 15 but gave no details on what imports would be affected.

Trump previously announced plans to raise tariffs on an additional $300 billion of Chinese imports on Sept. 1 but postponed a portion of that to Dec. 15.

In a release after Trump's tweet sent markets sputtering, the U.S. Chamber of Commerce issued a statement from executive vice president Myron Brilliant urging calm.

'While we share the President’s frustration, we believe that continued, constructive engagement is the right way forward,'Brilliant said. 'Time is of the essence. We do not want to see a further deterioration of US-China relations. We urge the administration and the government of China to return to the negotiating table to complete an agreement that addresses concerns over technology transfer practices, intellectual property enforcement, market access, and the globally damaging impact of Chinese domestic subsidies.'

China's government appealed to Trump this week to compromise in deadlocked talks aimed at settling the dispute that has battered exporters on both sides and threatens to tip the global economy into recession.

The tariffs include a 25 per cent tax on automobiles and a 5 per cent tariff on auto parts – a key export for the U.S. with a widespread impact, including in critical battleground states.

President Trump demanded U.S. companies come 'HOME' from China

Trump's economic team, headed by Larry Kudlow, was huddling on Friday amid the tweets and market reaction

That tariff will take effect in December, having been paused previously.

According to state-run media: 'China’s imposition of tariffs is a forced response to the unilateralism and trade protectionism of the United States.' The Global Times article expressed hope the trade war could get resolved “on the premise of mutual respect and equality and trustworthiness in words and deeds.'

The move comes after Trump economic advisor Larry Kudlow said the two sides had a 'constructive' call.

‘The deputies had a very constructive conference call - I believe it was yesterday - and have agreed to have an additional conference call at the deputies’ level,' said Kudlow.

'And they're working through some of the key issues. And then they will pass on a recommendation to the principles .... Of course, we are still planning for the Chinese team to come over here in September. I don't want to name the date right. Now we're waiting. So the deputies call was quite constructive and this may lead to a meeting of the principles here in Washington DC,' he said.

The trade power-play comes amid the political crisis in Hong Kong, as Beijing decides how to handle mass protests.

Senate Majority Leader Mitch McConnell said on Tuesday: 'China's trading partners, including the U.S., should make it clear that any crackdown [on Hong Kong] would have real and painful costs.'

He also wrote: 'The world is awakening to China's abusive and aggressive practices... Every trading nation and democracy that values individual liberty and privacy has a stake here.'

Senate Majority Leader McConnell made the remarks in an op-ed, titled 'We Stand with Hong Kong', published by Wall Street Journal.

Beijing has warned against political interference.