North American stock markets plummeted Friday after the U.S.-Sino trade war heated up with President Donald Trump angrily responding to China’s tariff retaliation.China kicked off a political firestorm by announcing tariff hikes on US$75 billion of U.S. products including some agricultural products, crude oil, and small aircraft in retaliation to U.S. tariffs. China will also boost import duties on U.S.-made autos and auto parts.Trump reacted by ordering U.S. companies to “immediately start looking for an alternative to China,” although it’s unclear what authority he has to make this happen.Markets plunged as investors digested the back-and-forth, said Philip Petursson, chief investment strategist at Manulife Investment Management.“As of today this trade war seems to have escalated and the uncertainty has escalated and the impact on the global economy, the downside risks we would argue, have accelerated as well,” he said in an interview.The S&P/TSX composite index closed down 215.88 points at 16,037.58. That’s 3.8 per cent below the record high reached in April but up 12 per cent so far this year.In New York, the Dow Jones industrial average was down 623.34 points at 25,628.90, the third large fall in as many weeks. The S&P 500 index was down 75.84 points at 2,847.11, while the Nasdaq composite was down 239.62 points or three per cent at 7,751.77.Trump further responded after markets closed by saying the 25 per cent tariff on US$250 billion worth of Chinese imports will rise to 30 per cent on Oct. 1 and that 10 per cent tariffs on US$300 billion worth of goods would rise to 15 per cent on Sept. 1.Trump had previously delayed some tariffs until Dec. 15 in a reprieve to holiday shoppers buying electronics, apparel, and shoes.“So it would be difficult to deny that Americans are paying for the tariffs in that environment,” Petursson said in reference to Trump’s claims that China pays for tariffs instead of U.S. consumers through higher prices.Among the “shocking comments” from the president was his lashing out at China’s President Xi Jinping, and Federal Reserve chairman Jerome Powell for refusing to signal a large interest rate cut, said Petursson.“My only question is, who is our bigger enemy, Jay Powel (sic) or Chairman Xi?,” Trump wrote in one of several tweets he fired out.Markets were expected to focus Friday on signals from Powell about interest rates.In a speech Friday an annual policy conference in Jackson Hole, Wyo., Powell said: “we will act as appropriate to sustain the expansion.” That followed less dovish comments Thursday from two Fed presidents arguing against rate cuts.Together they suggest a lower probability for a 50 basis point cut in rates in September.“Certainly the message out of Powell and out of some of the others was that we could go another 25 but 50 is a little bit more of a challenge to justify,” Petursson said.“[But] I think given what has gone on today…I don’t think that we’ll get through September without a cut.”The Canadian dollar traded for an average of 75.13 cents US, compared with 75.23 cents US on Thursday.Ten of the 11 major sectors of the TSX closed lower. Materials were the exception, rising 1.8 per cent as investors sought safety in gold. That helped Yamana Gold Inc. and Kinross Gold Corp., which gained 10 and 7.7 per cent respectively.The December gold contract was up US$29.10 at US$1,537.60 an ounce and the September copper contract was down 2.75 cents at US$2.53 a pound.Energy lost more than three per cent with several producers losing big on a drop in oil prices, including Encana Corp. and Canadian Natural Resources.The October crude contract was down US$1.18 at US$54.17 per barrel and the October natural gas contract was down 0.7 of a cent at US$2.16 per mmBTU.Industrials also fell as shares of Bombardier Inc. lost 8.1 per cent and Cargojet Inc. rose 12.9 per cent on a deal with Amazon.