Trade war escalates: Trump threatens to slap retaliatory tariff on EU cars

US President Donald Trump kept up pressure on trading partners on Saturday, threatening European automakers with a tax on imports if the European Union retaliates against his plan to slap tariffs on aluminium and steel.

Trump's tweet suggested he is refusing to yield to US business interests and foreign trading partners alarmed at the prospect of a trade war that rattled financial markets this week.

"If the E. U. 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," Trump wrote on Twitter. "They make it impossible for our cars (and more) to sell there. Big trade imbalance!"

If the E. U. wants to further increase their already massive tariffs and barriers on U. S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.