BERLIN (AFP)

Plunging stock markets worldwide are a "wake-up call" that show there would "only be losers at the end" of any trade war, German government spokesman Steffen Hebestreit said Monday.

"We must now act smartly and act clearly to avoid... escalating a trade war," he told a Berlin press briefing, adding that the European Union needed "to represent our interests clearly and resolutely".

Markets worldwide have plunged after US President Donald Trump last week announced sweeping new tariffs, including a 20 percent duty on European Union exports.

Germany's bluechip DAX index of the largest companies at one point fell 10 percent on Monday morning before recovering somewhat to be down 5.3 percent at 0945 GMT.

Hebestreit said that on financial markets, "considerable value is being destroyed" and that "you can already see the economic upheavals that affect everyone".