Stock markets have dropped sharply after US president Donald Trump reignited fears of a trade war by threatening to impose high tariffs on the EU and smartphone giant Apple.European shares fell 1.7 per cent,

The president threatened both Apple and the European Union with higher tariffs on social media Friday morning, saying that trade talks with the Europeans had stalled.

President Donald Trump threatened once again on Friday to intensify his trade war, recommending a 50% tariff on European Union goods starting June 1, and warning Apple he may impose a 25% tariff on any iPhones manufactured outside the U.