SINGAPORE - Stocks dived on Thursday and investors scrambled for the safety of bonds, gold and the yen, fearing new US tariffs have intensified a trade war threatening to tip the world into recession.

The dollar was swept to a six-month low, falling along with US bond yields after President Donald Trump imposed tariffs that raise effective import taxes to the highest levels in a century.

"This is a game-changer, not only for the US economy but for the global economy," said Olu Sonola, head of US economic research at Fitch Ratings.

"Many countries will likely end up in a recession. You can throw most forecasts out the door if this tariff rate stays on for an extended period of time."

Nasdaq futures dropped 3.2 percent, European futures were down nearly 2 percent and the Nikkei's 3 percent fall in Tokyo - touching eight-month lows - led heavy losses across Asia.

Apple's market capitalisation fell by more than $240 billion as its shares slid 7 percent in after-hours trade. Nvidia's market cap dropped 5.6 percent or $153 billion.

Benchmark 10-year US Treasury yields fell more than 15 basis points to a five-month low of 4.04 percent and markets priced a higher chance of interest rate cuts even though the tariffs are likely to cause US inflation to spike sharply.

"You are going to have a supply-side shock via tariffs on the US economy, on prices," said Tai Hui, Asia-Pacific chief market strategist at JP Morgan Asset Management. "And then (there's) the uncertainty when it comes to businesses and consumers, both of which could be problematic for growth."

Trump announced a baseline 10 percent tariff on imports with far higher levies on some trading partners, particularly in Asia.

China was hit with a 34 percent levy, Japan got 24 percent, Vietnam 46 percent and South Korea 25 percent. The European Union was hit with a 20 percent levy.

According to Fitch Ratings, the effective US import tax rate has shot up to 22 percent under Trump from just 2.5 percent in 2024, reaching levels last seen around 1910.

Vietnamese stocks slumped 6 percent.

Oil, a proxy for economic activity, dropped more than 2 percent to put benchmark Brent futures at $73.28 a barrel. Australian shares and the Australian dollar fell.

Gold hit a record high above $3,160 an ounce and Japan's yen jumped more than 1 percent to 147.29 per dollar as foreign exchange traders looked for safety outside the US dollar.

The euro rose 0.6 percent to $1.0912.