Global stock markets fell on Thursday as investors reacted to US President Donald Trump’s sweeping announcements on tariffs.
The UK’s FTSE 100 share index fell 1.5% and other European markets were also lower, echoing falls seen earlier in Asia.
While stocks fell, the price of gold, which is seen as a safer asset in times of turbulence, touched a record high.
Traders are concerned about the global economic impact of Trump’s tariffs, which they fear could stoke inflation and stall growth.
Markets across Asia had fallen sharply after Trump’s announcement, with the Nikkei in Japan closing down nearly 3% and Hong Kong’s Hang Seng index 1.5% lower.
Shares in Europe followed the downward trend, with Germany’s Dax index down 2.2% and France’s Cac 40 dropping 2.5%.
The price of gold hit a record high of $3,167.57 an ounce at one point on Thursday, before falling back.
Futures markets also suggest US shares will open lower when trading begins later. The S&P 500 is indicated to fall by 3% and the Dow Jones by 2.4%.
The decision by the US government to impose a combination of a 10% baseline levy and higher duties on a number of other trading partners reverses decades of liberalisation that shaped the global trade order.
“This is the worst-case scenario,” said Jay Hatfield, chief executive at Infrastructure Capital Advisors.
“Enough to potentially send the US into a recession,” he added, echoing nervous market sentiment.
