Financial markets extended their losses on Thursday after President Donald Trump said he would impose heavy tariffs on imports of steel and aluminium “for a long period of time”, in a move likely to trigger retaliation from the EU and China and raise fears of a trade war. 

Mr Trump announced that he would next week sign an order imposing tariffs of 25 per cent on steel and 10 per cent on aluminium, breaking a deadlock among his advisers that had delayed action for months. 

The news prompted a warning from the EU and a steep fall on equity indices, although shares in US producers jumped. In late afternoon trading in New York, the S&P 500 was down 1.6 per cent and the Dow Jones Industrial Average off 1.9 per cent. Steelmakers rallied on the news, however, with US Steel rising as much as 9.5 per cent and AK Steel up more than 13 per cent during the trading day.