LONDON: European stock markets sank on Wednesday as US President Donald Trump's steep new tariffs came into effect and triggered a fresh sell-off in global equities.
Indices fell back into the red at the open, a day after partially rebounding from a days-long sell-off on hopes that Washington might temper some of the levies.
Paris and Frankfurt were down around 1.8 percent in early deals, as goods from the European Union now face a 20 percent tariff when entering the United States. London slid 1.9 percent, with Britain having been hit with a 10 percent levy on Saturday.
Any hopes of a last minute roll-back on tariffs were dashed, as the United States hit China—its major trading partner—the hardest, with tariffs imposed on its products now reaching 104 percent.
"The feared escalation of the trade war is playing out and it's sent another jolt of deep pessimism through markets," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"The world's largest and second largest economies are now locked in a trade war, and neither nation seems willing to back down," she added.
Fears of a recession in the United States and beyond have hit most sectors, including luxury, automakers and banks.
Pharmaceuticals, feared to be the next victim of Trump's tariffs, also fared particularly badly.
British drugmakers AstraZeneca and GSK topped the losers board in London, both down over four percent.
Europe's most valuable company Novo Nordisk, which produces blockbuster diabetes and weight-loss treatments Ozempic and Wegovy, fell around five percent in Copenhagen.
French pharmaceutical group Sanofi and German biotech firm Sartorius also dropped around five percent.
French semiconductor firm STMicroelectronics lost over four percent and automaker Stellantis, whose brands include Jeep, Fiat and Peugeot, retreated over three percent.
British oil majors BP and Shell were also down over three percent as oil prices fell further on fears of a knock to global consumption.