Focus was also on Brussels, where EU leaders facing deep divisions on migration met for a summit that the embattled German Chancellor Angela Merkel said could decide the fate of the bloc itself.
Escalated trade concerns were "continuing to hamper sentiment and drain conviction", said Charles Schwab analysts.
"The recovery in the stock markets could not last long," said Fawad Razaqzada, a market analyst at Forex.com.
Trade fears were being compounded by expectations that borrowing costs will steadily rise worldwide, causing investors to feel "downbeat," he added.
Key eurozone indices were one percent or more lower at the close, while London ended the day just a touch weaker.
Trade war worries also continued to weigh on Wall Street, but US stocks shook off early weakness and finished the session solidly higher.
Analysts pointed to gains by US financial sector stocks that have underperformed in recent sessions and stand to benefit as investors rebalance portfolios at the end of the second quarter.
Concerns about the Chinese economy are adding to a knock in confidence, with the yuan continuing to weaken and mainland stocks now in bear market territory having fallen more than 20 percent from recent highs.
- Get used to it -
"Once again, European indices are trading in the red," noted Craig Erlam, senior market analyst at Oanda trading group.
"We may have to get used to this risk averse environment in the near-term," he added.
Dealers are struggling to get a handle on the situation owing to confusion over US President Donald Trump's trade strategy.
"There's a lot of uncertainty out there," said William Lynch of Hinsdale Associates. "We are not getting anything concrete from the administration in terms of what it intends to do."
Leading pharmacy chains tumbled on news that Amazon acquired online pharmacy PillPack for terms that were undisclosed in its biggest move yet into healthcare.
CVS Health fell 6.1 percent, Walgreens Boots Alliance dropped 9.9 percent and Rite Aid declined 11.1 percent. Amazon jumped 2.5 percent.
Neil Saunders of the research firm GlobalData Retail, said the Amazon acquisition "is a warning shot" for the pharmacy sector.