Europe's shares joined a China-led sell-off Monday (August 5).
The Pan-European STOXX 600 index down 1.5% early morning, as trade war worries led investors to dump stocks and run for safe-havens like government bonds.
It dates back to Donald Trump's threat last week to slap 10% tariffs on another $300 billion of Chinese imports.
Commodity-linked stocks hit hardest, as China's yuan fell below 7 to the dollar for the first time in a decade, making it more expensive to buy dollar-denominated metals.
(SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "The trade war is not over and I fear it will go on at least until the (U.S.) presidential election and Europe's turn has not come yet.
If you listen to the menacing messages from the White House you know that a lot can still happen." The sell-off comes the same day a survey showed euro zone business growth almost ground to a halt in July as demand crumbled.
The IHS Markit final purchasing managers' index fell to 51.5 in July from June's 52.2.
Italy was alone in the bloc's four biggest economies where the PMI rose, suggesting a slight recovery.
But growth slipped in France and Spain and activity in Germany's private sector hit its weakest level in more than six years.
Last month the ECB all but promised to ease policy further, and Monday's survey will do little to change market expectations for loosening.
Forward-looking indicators suggest there won't be an economic turnaround anytime soon.
Investor morale in the euro zone in August fell to its lowest since October 2014, according to a Sentix survey released Monday.
Sentiment down to -13.7, well below analyst expectations.