US President Donald Trump cautioned against "stupid" panic on Monday as a global stock market rout deepened after Beijing retaliated against his tariffs offensive.

Shares in New York joined the slump, with all three major US indices falling more than three percent in early trading.

European equities were deep in the red but Asia fared worse, with Hong Kong's Hang Seng index crashing 13.2 percent, its biggest drop since the 1997 Asian financial crisis, and Tokyo's Nikkei 225 falling an eye-watering 7.8 percent.

A 10-percent "baseline" tariff on imports from around the world took effect Saturday but a slew of countries will be hit by higher duties from Wednesday, with levies of 34 percent for Chinese goods and 20 percent for EU products.

Minutes before the markets opened in New York, Trump posted that his tariff reforms were "a chance to do something that should have been done decades ago."

"Don't be Weak! Don't be Stupid!... Be Strong, Courageous, and Patient, and GREATNESS will be the result!" he urged.

Beijing announced last week its own 34-percent tariff on US goods, which will come into effect on Thursday.

The move pushed Trump to chastise China for not heeding "my warning for abusing countries not to retaliate" as he called Beijing "the biggest abuser of them all" on tariffs.

But Chinese vice commerce minister Ling Ji said the tit-for-tat duties "are aimed at bringing the United States back onto the right track of the multilateral trade system."

"The root cause of the tariff issue lies in the United States," Ling told representatives of US companies on Sunday.

EU trade ministers gathered in Luxembourg on Monday to discuss the bloc's response, with Germany and France having advocated a tax targeting US tech giants.

"We must not exclude any option on goods, on services," said French Trade Minister Laurent Saint-Martin.

'Aggressive' options

The 27-nation bloc should "open the European toolbox, which is very comprehensive and can also be extremely aggressive," he said.

German Economy Minister Robert Habeck likewise said Europe should be prepared to use its trade "bazooka" -- a new anti-coercion mechanism allowing it to punish any country using economic threats to exert pressure on the EU.

But signs of divergence emerged from Ireland, whose low corporate tax rate has attracted US tech and pharmaceutical companies.

Targeting services "would be an extraordinary escalation," said Irish Trade Minister Simon Harris.

Trump on Sunday had doubled down, saying "sometimes you have to take medicine to fix something."

He told reporters aboard Air Force One that world leaders were "dying to make a deal."

Trillions of dollars have been wiped off stocks worldwide since Trump announced the tariffs last week, and the losses deepened on Monday.

JPMorgan Chase CEO Jamie Dimon warned the tariffs "will likely increase inflation," in a letter to shareholders Monday.

"Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth," he said.

Taipei recorded its heaviest loss on record as it sank 9.7 percent.

The Stoxx Europe 600 index was down five percent in early afternoon deals, with more than 1.5 trillion euros of market capitalization going up in smoke over just a few days.

The main US oil contract dropped below $60 a barrel for the first time since April 2021 on worries of a global recession.

Global demand 'vanishing'

"The market's telling you in plain language: global demand is vanishing, and a global recession is on the cards and coming on fast," said Stephen Innes at SPI Asset Management.

US officials said more than 50 countries have reached out to Trump to negotiate.

Japan's Prime Minister Shigeru Ishiba said on Monday he had held a call with Trump in which they agreed to more talks on the tariffs.

Benjamin Netanyahu, prime minister of Israel -- hit with 17 percent tariffs, despite being one of Washington's closest allies -- was due on Monday to become the first leader to meet Trump since last week's announcement.

Vietnam, a manufacturing powerhouse with a big trade surplus with the United States, has already reached out and requested a delay of at least 45 days to thumping 46-percent tariffs.