US President Donald Trump imposed hefty tariffs on his country’s top three trading partners, threatening to ignite a retaliatory trade war that could rock richly valued stock markets.

Investors’ worst fears about the new administration were confirmed on Sunday after Mr Trump signed orders imposing tariffs of 25 per cent on goods from Canada and Mexico and 10 per cent on China. Anticipation of the levies dragged Wall Street’s three major benchmarks lower on Friday, led by a 0.8 per cent drop for the Dow Jones Industrial Average. The S&P 500 fell 0.5 per cent and the Nasdaq 100 0.1 per cent.