Global stocks have sunk, the day after President Donald Trump announced a brand new tariff, expected to raise prices and weigh growth in the United States and abroad.

The S&P 500 tracked 500 of the largest U.S. companies, down 4.8% – the worst day since Covid collapsed in 2020. Earlier in the day, the financial markets fell from Asia to Europe.

Nike, Apple and Target were the biggest hits in the biggest hits, all of which dropped by more than 9%.

At the White House, Trump told reporters that the U.S. economy would “prosper” because he decided to impose at least 10% tariffs on imports, which he believes would increase federal revenue and bring U.S. manufacturing home.

The Republican president plans to hit dozens of other tax-collected products, including trading partners such as China and the EU.

China faces 54% tariffs and the EU faces 20% tariffs, both vowed to retaliate on Thursday.

Tariffs are taxes on goods imported from other countries, and Trump announced plans on Wednesday to raise those responsibilities to some of the highest levels over more than 100 years.

The World Trade Organization said this is “very concerned” and estimated that trade volumes could lead to a 1% shrinkage this year.

Traders are also concerned about the global economic impact of Trump tariffs, which they fear will cause inflation and stall growth.

The S&P 500 was worth about $200 million on Thursday, continuing a selloff that has been underway since mid-February for fear of a trade war.

Dow Jones closed about 4%, while Nasdaq stock was about 6%.

Earlier, the UK’s FTSE 100 index fell 1.5%, while other European markets also fell, reverberating in Asia.

On Thursday, at the White House, Trump doubled on a high-risk policy aimed at reverseing decades of U.S.-led liberalization, which shapes the global trade order.

“I think it’s a good situation,” he said. “It’s an operation like a patient does it, and it’s a big deal. I say that’s it.”

“The market will thrive. Stocks will thrive. The country will thrive.”

Trump also said he is willing to negotiate with trading partners on tariffs.

Canadian Prime Minister Mark Carney said Thursday that the tax-paying country that imposes 25% of vehicles imported from the United States will retaliate.

Trump imposed 25% tariffs on Canada and Mexico last month, although he did not announce any new responsibilities to North American trading partners on Wednesday.

Now, companies are facing the option of swallowing tariff costs, working with partners to share the burden, or passing it on to consumers, and risking sales drops.

This could have a significant impact, according to some estimates, as U.S. consumers spend about 10 to 15% of the world economy.

While stocks fell Thursday, gold prices were seen as safer assets during turbulent times, hitting a record high of $3,167.57 per ounce at some point on Thursday.

The dollar also weakens many other currencies.

In Europe, tariffs could lower growth by nearly a percentage point, according to analysts at major asset management, and would hit further if the group retaliates.

In the U.S., the recession is likely to have no other changes, such as the big tax cuts that Trump also promised.

She said Trump’s goal to improve manufacturing is a years-long process “if it happens.”

“At the same time, high tariffs on imports could immediately cause economic restrictions, with limited short-term benefits,” she said.

On Thursday, Stellantis, which makes Jeep, Fiat and other brands, said it is temporarily halting a factory in Toluca, Mexico and a factory in Windsor, Canada.

It said the move was a response to Trump’s 25% tax on automobile import taxes, which would also result in temporary layoffs of 900 people at five U.S. factories providing those plants.

In the stock market, most of Nike’s sportswear in Asia are the worst among Standard & Poor’s, with stocks down 14%.

Stocks of Apple, which rely heavily on China and Taiwan, fell 9%.

Other retailers also fell, with targets down about 10%.

Motorcycle maker Harley-Davidson, the EU targets retaliatory tariffs during Trump’s first term, this time a potential retaliation target – a 10% drop.

In Europe, shares of sportswear company Adidas fell more than 10%, while shares of rival Puma fell more than 9%, as key countries that manufacture commodities were subject to huge expropriation.

Among luxury companies, jewelry maker Pandora fell more than 10%, while LVMH (Louis Vuitton Moet Hennessy) fell more than 3% after imposing tariffs on the EU and Switzerland.

“You see retailers are being destroyed now because tariffs have expanded to countries we didn’t expect,” said Jay Woods, Global Chief Strategy for Free Capital Markets.