Trump's choice of J.D. Vance as his running mate for the top job in Washington added to the worries, driving traders to sell shares perceived to be at risk.
European carmakers and luxury stocks were already looking fragile, given the recent escalation in trade tensions between the European Union and Beijing.
Vance said in a televised interview on Monday China was "the biggest threat" to the United States right now, and not Russia's war in Ukraine.
Vance's tough talk on China and opposition to more aid for Ukraine have reinforced the view that trade barriers would rise, should he and Trump win, and Europe's export-oriented economy looks vulnerable.
"It is a further step away from the 'business friendly' Republican party image of old, and a step closer to the possibility that the MAGA movement will continue after Trump, a movement previously considered to have limited shelf-life," Lindsay James, investment strategist at Quilter Investors, said.
"Commitment to NATO will be on even more shaky ground as will support for Ukraine, a risk that goes beyond financial markets but is captured by the notion of 'risk premium' that will surely increase in European equities as a result," James said.
Among European automakers, which are heavily reliant on exports for growth, Porsche AG was the biggest loser on Tuesday, down as much as 5.7% in Frankfurt.
Traders linked the drop to the view that a tougher U.S. stance over China could create another headwind for its economy, hurting companies that do business there. Investors are also concerned about possible tariffs from Trump on European vehicles, which are already at risk of retaliation from Beijing over EU duties on Chinese electric imports.
Barclays has forecast a 20% U.S. tariff on European carmakers could hurt the euro. Volvo Car, Mercedes and part suppliers Forvia and Valeo fell between 1.6 and 3.3%.
"Given Trump's platform is to put America first, it's hard to imagine that a Trump presidency is really good for asset markets outside the US," said Michael Metcalfe head of macro strategy at State Street.
"and if you're talking about massive tariffs on China, it's hard to see that being anything but a negative for Europe," he said.
Europe's region-wide STOXX 600 index dipped 0.4%. Over the past two months, the STOXX has lost around 1% whereas the S&P 500 has gained more than 6%.
Some European clean energy stocks were also under pressure, adding to Monday's declines on concerns Trump would reduce support for renewables in favour of fossil fuels.
Wind energy firms Orsted and Vestas Wind were down 3.2% and 2.3%, respectively. The two fell by 5.5%-6% the day before.
Earlier on Tuesday, Citi removed buy-rated Vestas from its focus list, saying recent polls could boost Trump's chances.
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