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Washington said it will impose the tariffs on steel and aluminium imports from the European Union, Canada, Mexico at midnight.
The announcement prompted an immediate European threat of retaliation, with EU chief Jean-Claude Juncker saying "counter-balancing measures" would be announced within hours.
New York stocks extended opening losses after Commerce Secretary Wilbur Ross announced the tariffs.
European key markets also fell, having earlier been on the path to recovery as investors took a more sanguine view of an ongoing political crisis in Italy.
The euro reversed earlier gains as inflation in the eurozone rose to the ECB's target in May, fuelled by a huge increase in oil prices as the US decided to pull out of a nuclear deal with Iran.
Asian equities bounced back from Wednesday's mauling as fears of turmoil in Italy were soothed by conciliatory noises from the country's two biggest populist parties.
"Fears over an Italian snap election have receded," noted Joshua Mahony, market analyst at IG traders.
The news had provided relief to global markets beginning on Wednesday after they were sent spinning by the crisis in Italy - the eurozone's third biggest economy - which many feared could lead to fresh elections that could essentially become a referendum on euro membership.
In Frankfurt, shares in Deutsche Bank fell sharply, losing seven percent at the close, after the US Federal Deposit Insurance Commission classified the German lender among its "problem banks" according to a person familiar with the matter.
The designation adds to the woes facing the big German bank, which also was downgraded to "troubled condition" by the Federal Reserve, the Wall Street Journal reported.
Oil prices, meanwhile, diverged, with WTI futures, the US benchmark, down as American production has surged.
Brent, the reference for much of the rest of the world, rose amid fears of curbs on Iranian and Venezuelan production.
Crude markets have been hammered since OPEC kingpin Saudi Arabia and Russia last week indicated they could lift a cap on production, which has supported prices for two years, as an oversupply crisis eases.
Investors are looking forward to the release on Friday of key US jobs figures, which could provide some idea about the Federal Reserve's plans for raising interest rates.
Payrolls firm ADP estimated US private sector job growth at 178,000 in May, down from 204,000 in April and slightly below analysts' expectations.
Key figures around 1555 GMT:
New York - Dow Jones: DOWN 0.6 per cent at 24,528.16 points
London - FTSE 100: DOWN 0.2 per cent at 7,678.20 (close)
Milan - FTSE MIB: DOWN 0.1 per cent at 21,784 (close)
Paris - CAC 40: DOWN 0.5 per cent at 5,398.40 (close)
Frankfurt - DAX 30: DOWN 1.4 per cent at 12,604.89 (close)
EURO STOXX 50: DOWN 1.0 per cent at 3,406.65
Tokyo - Nikkei 225: UP 0.8 per cent at 22,201.82 (close)
Hong Kong - Hang Seng: UP 1.4 per cent at 30,468.56 (close)
Shanghai - Composite: UP 1.8 per cent at 3,095.47 (close)
Euro/dollar: UP at US$1.1673 from US$1.1664 at 2100 GMT
Pound/dollar: UP at US$1.3284 from US$1.3281
Dollar/yen: DOWN at 108.75 yen from 108.91 yen
Oil - Brent Crude: UP 1 cent at US$77.73 per barrel
Oil - West Texas Intermediate: DOWN US$1.23 cents at US$66.99 per barrel