UK shares have fallen sharply in morning trading, dragging the FTSE 100 index to its lowest level since December 2016.
Both London and major European markets were down more than 2% as a sell-off that started in Asia gathered pace.
Oil prices also sank, with Brent crude almost 5% lower at $58.60 a barrel.
Analysts said the arrest of Chinese telecoms giant Huawei's chief financial officer in Canada had revived worries over US-China trade tensions.
By mid-morning, London's 100-share index was down 2.6% at 6,744 points, while the Cac-40 in Paris and Frankfurt's Dax were both 2.4% lower.
Worst-hit sectors included miners, oil companies, carmakers and tech stocks.
Among the biggest fallers in London were mining firms Antofagasta, down 6.3%, and Glencore, which fell 5%.
On the FTSE 250, which also fell 2.6%, Thomas Cook gave up Wednesday's gains to be 12% lower, while Premier Oil slipped 10.4%.
Earlier, Asian markets also sank, with Tokyo's Nikkei shedding 1.9% and the Hang Seng in Hong Kong falling 2.5%.
"Investors are back in risk-off mode, with markets falling in the UK, mainland Europe and across Asia," said Russ Mould, investment director at AJ Bell.
"Markets are worried by numerous things: global economic growth, rising interest rates and the US-China trade war."
Norman Villamin, chief investment officer at Switzerland's Union Bancaire Privée, said the US-China clash represented much more than just a tussle over trade.
"It's not about trade – it's about who is going to be the economic and political leader of the world in 10 to 20 years from now. It's about tech, and who is going to dominate that landscape," he said.
Oil prices also fell as traders waited for news from the meeting of Opec oil-producing nations in Vienna, with some member states keen to agree on a production cut to drive up prices.
"We're looking for a sufficient cut to balance the market, equally distributed between countries," said Saudi Arabia's oil minister, Khalid al-Falih, before the meeting.