President Donald Trump on Saturday ramped up his rhetoric on trade tariffs, threatening the European Union with a tax on cars if they retaliate to his proposed steel taxes.

World leaders expressed concern after the president announced his plans on Thursday, with Mr Trump defiantly tweeting that “trade wars are good, and easy to win“. Jean-Claude Junker, president of the European Commission, also threatened retaliation.

On Saturday Mr Trump responded to Mr Junker’s threat, tweeting: “If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US.

“They make it impossible for our cars (and more) to sell there. Big trade imbalance!”

Mr Trump took many by surprise on Thursday by announcing in a freewheeling televised discussion at the White House that he would shortly be placing a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium.