Brussels prepares 'swift, firm and decisive' response to Trump threat of tariffs

The European Commission is preparing a "swift, firm and ... decisive" response to US threats of tariffs on steel and aluminium, a spokesman has said.

Commissioners are due to meet in Brussels on Wednesday to decide action to protect Europe's interests, amid growing fears of a trade war.

Theresa May told Donald Trump in a phone call on Sunday of her "deep concern" at the president's plans, restating her position that multilateral action" was the only way to resolve the problem of global overcapacity.

But there was little indication on Monday of Mr Trump backing away from his protectionist stance, as he used an early-morning tweet to link steel and aluminium tariffs with his demands for renegotiation of the "bad" Nafta free trade deal with Mexico and Canada.

And a White House account of Sunday's phone call made no mention of Mrs May's expression of concern, stating only that they discussed "President Trump's efforts to ensure fair and reciprocal trade".

The tweet followed the president's claim last week that "when a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win".

In a further escalation, Mr Trump has said the US "will simply apply a TAX" on cars made in Europe if the EU retaliates against the trade penalties he is seeking on imports of steel and aluminium.

European Commission spokesman Margaritis Schinas said the issue would be dealt with by EU chiefs on Wednesday, when "commissioners will discuss our reaction, which will be swift, firm and proportionate, based along three main lines and fully compatible with WTO (World Trade Organisation) rules".

"When someone takes unilateral and unfair action that puts thousands of European jobs at risk we have to act," said Mr Schinas at a Brussels press conference.

"And if the measures announced by the US president materialise in a way that affects European interests, we shall react ... in a decisive, but proportionate, and strictly WTO-compatible way.

"This is about Europe doing what it has to do to defend its interests. It is not about escalating anything."

Downing Street said the UK Government would await precise details of the US plans on steel and aluminium tariffs before commenting further.

Mrs May's official spokesman confirmed that, while the UK remains part of the European Union, any action would come as part of an EU-wide response.

Asked whether the UK was still hopeful of striking a US trade deal after Brexit in the light of Mr Trump's apparent shift towards protectionism, the spokesman said: "Both the Prime Minister and President have been clear on the importance of reaching a post-Brexit bilateral trade deal.

"The US is our biggest partner, we invest £500 billion in each others' economies and over four million Americans work in UK companies, so you would expect us to remain close partners and continue to work at the highest level to make the case for UK industry to the US government."

He added: "The Prime Minister has been clear in a number of forums, including the G20, in making the case that multi-lateral action is the way forward.

"The UK is a leading advocate for free trade and open markets and the WTO and for a global economy that works for everyone."