Investing.com - European equity indices slumped Thursday after U.S. President Donald Trump announced comprehensive trade tariffs on all imported goods, intensifying a global trade war that threatens to crimp economic activity.

At 02:02 ET (07:02 GMT), the DAX index in Germany dropped 2.3%, the CAC 40 in France fell 2.2% and the FTSE 100 in the U.K. slipped 1.5%.

Trump announces trade tariffs

Trump on Wednesday announced a 10% tariff on all U.S. imports, and imposed tariffs against select countries equivalent to about half of the duties they charge on U.S. goods.

China was by far the worst hit, with total U.S. tariffs against the country now amounting to 54%. The European Union will be subject to 20% tariffs, while Taiwan, Switzerland, Thailand, and Bangladesh will face between 30% and 50% tariffs.

The tariffs will take effect over the next week.

Trump also confirmed that the previously planned 25% tariffs on imported automobiles and auto parts would take place.

The full implementation of Trump’s trade policies represented a “substantial macro economic shock not currently incorporated in our forecasts,” said analysts at JPMorgan, in a note.

“This shock will likely be magnified by its impact on sentiment and through the retaliation of countries facing significant increases in their tariff rates,” JPMorgan analysts said, warning that a large tariff shock threatened a U.S. and global recession.

Reciprocation likely

European Commission President Ursula von der Leyen said the EU has a “strong plan” to retaliate against tariffs imposed by Trump but would prefer to negotiate.

“Europe has not started this confrontation. We do not necessarily want to retaliate, but if it is necessary we have a strong plan to retaliate and we will use it,” she said.

“We are already finalising the first package of countermeasures in response to tariffs on steel,” she said. “And we’re now preparing for further countermeasures to protect our interests and our businesses if negotiations fail.”

In Asia, China, Japan and South Korea have reportedly agreed to jointly respond to the U.S. tariffs.

Eurozone PMI data due

Data releases in Europe during the session will include eurozone services and composite purchasing managers’ index data for March.

In the corporate sector, Poland’s biggest fashion retailer LPP (WA: LPPP ) reported a sharp drop in its fourth-quarter net profit despite strong online sales, weighed by rising operational costs.

Crude slumps on tariffs concerns

Oil prices slid sharply Thursday after the announcement of comprehensive U.S. trade tariffs raised fears that economic growth will be hit globally, weighing on fuel demand.

At 02:02 ET, Brent futures dropped 3% to $72.69 a barrel, after dropping by as much as 3.2% earlier, its biggest daily percentage decline since March 5.

U.S. West Texas Intermediate crude futures fell 3.2% to $69.38 a barrel after slipping by as much as 3.4% earlier.

Adding to the bearish sentiment, the Energy Information Administration data on Wednesday showed U.S. crude inventories rose by a surprisingly large 6.2 million barrels last week.

Markets were also awaiting a meeting of the Organization of Petroleum Exporting and Allies later in the session, where the cartel is expected to outline plans to increase production.