Source: Sharecast
China said it would match the tariffs imposed by President Donald Trump and hit US imports with a 34% levy and added 11 firms to a list of companies barred from doing business in the country.
China's customs agency said it would also stop chicken imports from some US producers.
All major bourses were down sharply, with Germany's DAX down 4.95% to 20,641.72 and Britain's FTSE 100 by an identical percentage to 8,054.98.
Italy's FTSE Mib meanwhile plummeted 6.53% to 34,649.22.
Unlike during the previous session, euro/dollar fell 0.87% to 1.0956.
Brent crude was also lower, in part in anticipation of increased oil output from OPEC.
Gold was also down amid the intense selling pressure across financial assets - conspicuously save Bitcoin.
Raifeissen Bank, Sabadell, Deutsche Bank, Commerzbank, Danske Bank, Standard Chartered and BPER Banca were among the major fallers, with the Stoxx 600 sector gauge giving back 8.43%.
In other equity news, shares in Gerresheimer plunged 15% on a report that KKR has withdrawn from the private equity consortium pursuing a potential acquisition the German pharmaceutical packaging and drug delivery systems maker.
