Stock markets in the UK and Europe have suffered heavy falls after Donald Trump announced a number of tariffs, prompting fears of a global trade war.

The US president rattled investors by signing off on tariffs on China, Canada and Mexico over the weekend, triggering what was quickly described as a “Trump tariff tantrum”.

Stocks fell in Asia on Monday morning, followed by markets in Europe. The FTSE 100 share index shed 111 points to hit 8,562 points, falling back from last Friday’s record high.

Germany’s DAX index fell by 2% as it opened, while France’s CAC 40 was down by 1.9%. Spain’s IBEX dropped 1.7% and Italy’s FTSE MIB lost 1.4%.

Shares in some of the biggest European carmakers slumped. Volkswagen, BMW, Porsche, Volvo Cars, Stellantis and the commercial vehicle maker Daimler Truck all fell between about 5% and 6%. The French car parts supplier Valeo slumped by 8%.

Richard Hunter, the head of markets at the online investment platform Interactive Investor, said: “February seems likely to begin with a Trump tariff tantrum, with very early futures prices signalling declines of more than 600 points for the Dow Jones, and declines of 2% or more for the benchmark S&P 500 and Nasdaq indices.”

Trump announced 25% tariffs on Mexico and Canada, and additional 10% tariffs on Chinese goods.

In London, nearly every share fell, led by asset managers Polar Capital, which was down by 4.5%, while Intermediate Capital Group, the mining company Antofagasta and Scottish Mortgage Investment Trust all fell by more than 3%.

UK bank shares also fell, with Lloyds Banking Group down 1.8%, NatWest off 1.9% and HSBC down 1.4%.

Barclays, which was hit by an IT glitch that left thousands of customers locked out of their accounts on Friday and Saturday, was down by 2.5%.

Asian markets were the first to open since the weekend tariff announcements, with Japan’s Nikkei slumping 2.8% and the Hang Seng in Hong Kong 1% lower, although mainland Chinese markets remain shut for the lunar new year holiday until Wednesday.

Naeem Aslam, the chief investment officer at Zaye Capital Markets, said investors were bracing for heightened uncertainty in global trade and economic stability: “These downturns are driven by investor anxiety about the broader impact of tariffs on the global economy, particularly as European economies are highly intertwined with US trade policies.”

Kathleen Brooks, the research director at XTB, said: “This does not mean that the UK economy will avoid impact from the tariffs, but it does mean that the UK economy could be more resilient than elsewhere.”

She added: “It’s too early to know exactly what impact tariffs will have on the global economy, but it is fair to say that they have a high potential of triggering inflation, and weighing heavily on global growth, including the US economy.”