The United States and China have escalated their trade disputes by hiking tariff rates against each other again.

US President Donald Trump made his announcement of new tariff hikes on Chinese products ,  a 5 per cent increase on tariffs on Chinese imports. Those Chinese products worth $250 billion now being taxed at 25 per cent will be taxed  at 30 per cent starting on October 1, said Trump.

His move came after  China unveiled plans for duties of 10 per cent on $75 billion of US goods.

Trump also ordered US firms to leave China.  “Our great American companies are hereby ordered to immediately start looking for an alternative to China,” he tweeted on Friday.

Markets were hit hard as the trade war between world ‘s two largest economies escalated .

The NASDAQ plunged 3 per cent at Friday’s closing trade , the S& P 500 sharply dropped 2.6 per cent while The Dow Jones Industrial Average also sharply closed down 2.4 per cent at 25,629.