International stock markets have plummeted over nightamid fears of a global trade war. The markets have reacted poorly to the United States’ decision to impose a range of tariffs on nations across the globe, something President Donald Trump has called "medicine."

Overnight Australia's S&P/ASX 200 fell more than 6%, Japan's Nikkei 225 stock index lost nearly 8% and South Korea's Kospi dropped by 4.4%. In the United States stock markets saw similar trends, with the S&P 500 losing 4.2% and the NASDAQ finishing 5.3% down. Speaking onboard Air Force One, the US president reiterated his intention to follow through on tariffs which are due to come into effect in full this week. He said: "I don't want anything to go down. But sometimes you have to take medicine to fix something."

Mr Trump has said the tariffs are designed to address what he calls a “trade surplus” where countries export more goods to sell in US markets than they import to sell in their own.

He added: "I spoke to a lot of leaders, European, Asian, from all over the world. They're dying to make a deal.

"And I said, we're not going to have deficits with your country. We're not going to do that because to me, a deficit is a loss.

"We're going to have surpluses or, at worst, going to be breaking even."

The measures have already seen China respond with retaliatory tariffs while dozens of countries across the globe plan how best to respond.

Amid fears of a global trade war, Goldman Sachs has increased the chances of a recession in the United States in the next few months to 45%.

Prime Minister Sir Keir Starmer has said that he will introduce new measures to help UK businesses cope with a 10% tariff imposed on top of a 25% levy on all cars sold to the US.

Sir Keir promised to "shelter British business from the storm" as negotiations with the United States continue to drag on.

Accountancy firm KPMG has warned that the tariffs could see British GDP fall by 0.8% in 2025 and 2026.

Yael Selfin, chief economist at KPMG UK, said: "Given the economic impact that tariffs would cause, there is a strong incentive to seek a negotiated settlement that diminishes the need for tariffs.

"The UK automotive manufacturing sector is particularly exposed given the complex supply chains of some producers."