(Sharecast News) - Trading screens were a sea of red on Thursday with financial markets plunging after US President Donald Trump announced a return to a level of trade tariffs last seen during the dark period of the 1930s.
The pan-European Stoxx 600 index was down 2.57% at 523.12. Germany's DAX slumped 3.01% as its car industry faced 25% levies, while Britain's FTSE 100 fell 1.55% and France's CAC-40 3.31%.
European lenders, which until now had been one of the best performing segments of the markets, saw their Stoxx 600 sector gauge fall 5.53%.
"Trump's tariffs, along with the government job cuts and the potential for massive spending cuts, seem doomed to kill the goose that laid the golden egg," said IG chief market analyst Chris Beauchamp.
"Of course Trump and his team hope that their tax cuts and deregulation agenda can create a bounce back that will shock and awe the world, but the pain that has to come first is likely to be brutal for equity markets worldwide."
Gold slipped from so-called 'overbought' levels following a sharp spike during the previous session, but analysts appeared to be confident that a top was probably not yet in place.
Meanwhile oil prices fell sharply on fears of a global economic slowdown, with Brent crude down by about 5% to $70.03 a barrel on the ICE.
In equity news, shipping giant Maersk fell almost 10% with rivals Hapag-Lloyd falling 8% and DSV 5.3%.
German sports brands Puma and Adidas slumped by 11% - both companies source vast amounts of clothing and apparel from Vietnam.
Luxury stocks were also hard hit, with Danish jeweller Pandora down 11%, Burberry 10%, LVMH 6% and Gucci owner Kering 7.5%.