Top officials promised Americans that beef on their holiday menus was safe, saying the mad cow case unearthed in northwestern Washington State posed a negligible health threat.
CBS News' Larry Miller reports that tissue samples of the infected cow have been sent to Britain for a definitive diagnosis — which should take five days. All results will be turned over to the U.S.DA.
"We are calling this a presumptive positive," said Ron DeHaven, Deputy U.S. administrator for animal and plant health inspection.
The United Arab Emirates and China, which in 2002 imported 532 million dollars of meat products, became the latest nations to suspend U.S. beef imports.
Japan, the world's biggest importer of U.S. beef on a value basis, imposed an immediate ban after the U.S. announcement late Tuesday, and Mexico, the top importer by tonnage, quickly followed on Wednesday.
South Korea, Hong Kong, Singapore, Malaysia, Taiwan, Australia and Thailand, Paraguay, Chile, Brazil, Colombia, Russia, Peru, Canada, South Africa, and Trinidad and Tobago all halted imports, leaving the politically weighty U.S. beef industry in turmoil.
The scare knocked fears of a Christmas holiday terror strike to rival the September 11 attacks off the top of U.S. news bulletins.
In the first direct blow to the $40 billion beef sector, transactions on the Chicago Mercantile Exchange were frozen Wednesday after live cattle prices fell by the maximum permissible margin.
Shares of the world's biggest hamburger chain, McDonald's, tumbled $1.32 or 5.22 percent to finish at 23.96 dollars.
Its rival, Wendy's, slipped $1.87 or 4.72 percent to $37.79 even as it told customers that the beef in its burgers was safe.
Amid all the chaos, residents in the tiny town of Mabton, Wash., the location of the cow linked to the disease, tried to find humor in the tense situation.
Linda Chester of the Silver Dollar Inn told CBS News Correspondent Stephan Kaufman they may serve a "mad cow burger."
"We do a lot of roast beef specials," she said. "We're going to stick with our beef."
U.S. Agriculture Secretary Ann Veneman said authorities were doing all they could to protect consumers and said that as the spinal cord and brain of the infected cow had not entered the food chain, the impact of the case should be isolated.
"We continue to believe the risk to human health from this situation is extremely low and people should feel confident in our meat supply," she told reporters in a conference call.
States neighboring Washington were hesitating to ban cattle and beef from the state, but officials admitted they had been wrong-footed by the surprise announcement in Washington.
The U.S. beef industry, hoping to avoid the fate of its European counterpart, which was savaged by the disease, mobilized to stop further cases entering the food chain.
Meat processing firm Verns Moses Lake Meats, of Moses Lake, Washington state, recalled about 20 beef carcasses that may have been exposed to raw tissue containing bovine spongiform encephalopathy.
And the farm where the four-and-a-half-year old infected cow was kept before slaughter, about 40 miles (65 kilometers) southeast of Yakima in Washington state, quarantined its remaining 4,000 head of cattle.
Veneman insisted it was too early to predict ruin for the U.S. beef industry.
"We export about 10 percent of what we produce, so obviously that will probably have some impact on the market. At this point it's too early to determine how much," she said.
Activist groups called on Washington to impose tougher standards to ensure the safety of the food supply. Michael Hansen, with the advocacy group Consumers Union, said the United States should adopt the same stringent testing as Europe and Japan.
Although 37 million cows were slaughtered here last year, only 20,000 were tested for mad cow disease, less than France tests each month. "For us to recover our export market, they are going to have to do more extensive testing," Hansen said.
Some lawmakers plan to introduce legislation to raise standards to detect mad cow disease. "When we sit down at the dinner table, we should know that what we are eating is as safe as we can make it," said Senator Dick Durbin.
Rep. Gary Ackerman (D-N.Y.) has redoubled his efforts to prohibit diseased animals from entering the food chain. "The question is: Would you have a steak from the healthy part of a mad cow?" Ackerman said Wednesday.
The only previous outbreak of mad cow disease in North America was a single case at a farm in Alberta, Canada, in May.
Mad cow disease has been linked to a form of the fatal brain-wasting Creutzfeldt-Jakob disease that affects humans.
More than 130 people have died in Britain from Creutzfeldt-Jakob disease since 1996, with at least four more fatalities in France.
Ninety percent of the beef produced in the United States is consumed domestically. The average American annually chows down on about 31 kilograms (68 pounds) of beef, second only to chicken, according to industry figures.
U.S. exports grew in the 1990s when mad cow disease hit European cattle.