US President Donald Trump has claimed "trade wars are good" as he responds to controversy over his decision to impose tariffs on steel and aluminium imports.

On Thursday Mr Trump announced he would shortly be placing a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium.

The move surprised a number of Republican leaders and prompted a global sell-off in stocks and caused the US markets to fall sharply.

America's three main stock markets dropped more than one per cent on Friday morning as investors reacted to the news, with the Dow Jones down almost 300 points, or 1.5 per cent, shortly after markets opened.

Mr Trump spent Friday morning tweeting in defence of his decision, saying the US was "losing billions of dollars on trade" and the US must "protect our country and our workers".