European Commission President Jean-Claude Juncker has said the European Union would have no choice but to respond in kind if the United States finalised plans to impose tariffs on steel and aluminum imports from Europe.
It comes after US President Donald Trump spoke out defiantly against global criticism of his plan to impose tariffs on steel and aluminum imports.
Mr Juncker said: "If the Americans impose tariffs on steel and aluminum, then we must treat American products the same way.
"We must show that we can also take measures. This cannot be a unilateral transatlantic action by the Americans."
"I'm not saying we have to shoot back, but we must take action."
Earlier, in an early morning tweet, Mr Trump said "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.
"Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big. It's easy!" the president wrote.
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. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!— Donald J. Trump (@realDonaldTrump) March 2, 2018
The stock prices of US steel and aluminum makers rose after Mr Trump announced hefty tariffs on metal imports to protect them from foreign competition.
However, many other companies saw stock price falls as they may face higher prices for raw materials, which will force them to raise prices for consumers.
A proposed tariff of 25% on steel imports and 10% on aluminum boosted the stock prices of steel makers, but industrial companies, aircraft manufacturers, carmakers saw their stocks fall.
The likelihood of higher prices for consumer products resulting from the tariffs hit the US stock market overall.
The Dow Jones Industrial Average closed down more than 400 points, or almost 1.7 %, on fears the tariffs would spark an international trade war.
The lack of detail about the tariffs created uncertainty as some countries might be exempt or taxed at a lower rate.
Carmakers and other users of the metals worried about retaliatory tariffs by other countries that might affect the cost of their finished products.
The World Trade Organization chief has said he was concerned by Mr Trump's plans to impose tariffs on steel and aluminium, warning a trade war was "in no-one's interests".
"The WTO is clearly concerned at the announcement of US plans for tariffs on steel and aluminium. The potential for escalation is real, as we have seen from the initial responses of others", WTO director-general Roberto Azevedo said in a statement.
"A trade war is in no-one's interests. The WTO will be watching the situation very closely."
Mr Trump believes the tariffs will safeguard American jobs but many economists say the impact of price increases for consumers of steel and aluminum, such as the auto and oil industries, will be to destroy more jobs than they create.
"Were going to build our steel industry back and our aluminum industry back," he said.
The move may also further complicate trade talks between the US, Canada and Mexico over renegotiating NAFTA, where rules that would affect the car industry are already a major sticking point
The US oil lobby has criticised the move, noting that its members rely on steel imports in drilling, on and offshore production, pipelines, liquefied natural gas terminals and refineries.
US natural gas trade groups said they are concerned the tariffs could delay or reduce new pipeline projects as well as dent exports of liquefied natural gas.
US House of Representatives Speaker Paul Ryan hopes President Trump will consider the unintended consequences of his decision, a spokesman said.
Mr Ryan also wants Mr Trump to consider other approaches before taking action.
Mr Trump has said a formal announcement on the tariffs would be made next week.