Key Points

Rasmussen said that the bloc views the threat as "absolutely unacceptable and unjustified" and is prepared to respond if talks with Washington fail to produce a viable outcome.

"We are committed to continuing working with the United States on a negotiated outcome," he said, but the agreement has to be "mutually acceptable" on both sides.

He revealed that the EU will react with robust and proportionate countermeasures if required, Xinhua news agency reported. Sefcovic noted that the 27-country bloc is preparing potential countermeasures worth 72 billion euros (84 billion US dollars).

"We must be prepared for all outcomes, including, if necessary, well-considered proportionate measures to restore balance in our transatlantic relationship," he stressed.

Sefcovic said that he believes there is "still a potential to continue the negotiations" but stressed any deal will need the backing of all EU member states and the European Parliament.

On Sunday, German Vice Chancellor and Finance Minister Lars Klingbeil said that the EU must take firm action against the United States if tariff negotiations fail to ease the escalating global trade conflict, according to German newspaper Sueddeutsche Zeitung.

Klingbeil's remarks are in response to US President Donald Trump's threat on Saturday to impose a 30 per cent tariff on imports from the EU on August 1, after negotiations so far have failed to yield a deal.

Urging an end to the escalating trade tensions, Klingbeil said, "Trump's tariffs produce only losers. They threaten the American economy just as much as they harm businesses in Europe."

Klingbeil was quoted by Sueddeutsche Zeitung as saying that EU doesn't "need new threats or provocations," but "a fair deal."

- IANS