President Trump has threatened to reignite a transatlantic trade war by imposing hefty tariffs on European car imports.

“I like punitive tariffs”, he said ahead of a US Commerce Department report this week which is expected to recommend that the EU vehicle industry be classified as a threat to US national security because it robs the country of an industrial base needed to produce military hardware.

Mr Trump is expected to raise tariffs tenfold from 2.5 per cent to 25 per cent within the next three months.

Relations between the US and Europe have now slumped to their worst level since the start of the Iraq war as Brussels vowed to retaliate with “swift and adequate” measures of its own.

Analysts fear that a tit-for-tat