Minister for Foreign Affairs Helen McEntee has said Donald Trump's threats of tariffs would "rip up" an EU-US trade deal struck last year.
Mr Trump has said he will hit eight European allies with 10% tariffs from 1 February unless they agree to his purchase of Greenland, a semi-autonomous Danish territory, and has refused to rule out using military force to seize the island.
Speaking on their way into this morning's meeting of the Cabinet, Ms McEntee said it was "deeply regrettable" and Taoiseach Micheál Martin said he hoped "common sense will prevail".
Their comments came as Mr Trump and other leaders headed to Davos, Switzerland, for the World Economic Forum.
Ms McEntee told reporters it was clear that support for Greenland and Denmark was "absolute".
She said if the threatened tariffs are introduced, €93 billion of countermeasures would be "back on the table" as the EU needed to "respond strongly".
She emphasised it was "really important" for efforts to "engage in dialogue" with the US to be intensified over coming days, but added it is also important to have "a number of possible options to respond" if the threats come to fruition.
Ms McEntee said: "Of course, a threat of tariffs on eight member states is essentially a threat of tariffs on all member states, and it would be hugely regrettable for last year's deal between the US and the EU to essentially be ripped up."
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She said the threat of tariffs would not change "the overall resolve of Europe in support for Greenland".
"It is utterly regrettable that a president of the US would say that they're not focused on peace, but we need to engage, we need to use our voice, as we always have in Ireland, to try and bring reason and to try and bring calm to the current situation."
Asked if the world was "in turmoil" the Taoiseach said: "We had big difficulties last year, I think last year we managed to avoid reacting to every single statement that gets issued, or a statement that doesn't get issued."
He said he hoped that "common sense will prevail here in the interests of all our people that we represent, both in Europe and in the US".
The Taoiseach added: "A trade war would be very, very damaging indeed to workers across Europe, workers across the United States and indeed the world."
In Brussels, Tánaiste and Minister for Finance Simon Harris said that the next number of days will be "crucial" for EU-US relations.
He was in Brussels attending a Eurogroup meeting and told reporters there was "not an hour to spare" as efforts continued to de-escalate tensions.
He said: "It's absolutely important that intensive diplomatic efforts are put under way to try and de-escalate an extraordinarily dangerous economic situation.
"We all know that tariffs are bad for the Irish economy, they're bad for the European economy, they're bad for the US economy as well. But this is now deeper than that also.
"This has the potential to cause a spiral of destabilising actions that could have dire consequences.
"So cool heads must prevail, and there is not a moment to lose, and the next number of days will be crucial as Europe works to try and stabilise this situation and find a way forward. Because we are always stronger - the EU and the US - when we co-operate, when we collaborate."
