Europe is ready to unleash a $20 billion tariff retaliation against Trump to hit a 'long list' of American goods

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Donald Trump.

• The European Union has prepared retaliatory tariffs on $20 billion of US goods in case talks with the Trump administration fail.
• "We hope that it doesn't come to that and that we can a solution. If not, the EU Commission is preparing a rather long list of many of American goods. It would be around $20 billion," EU trade commissioner Cecilia Malmstrom said.
• Malmstrom's comments come as European Commission president, Jean Claude Juncker, travels to Washington for talks with the Trump administration aimed at diffusing the tensions between the two parties over Trump's trade war.

The European Union is readying retaliatory tariffs on around $20 billion worth of US goods coming into the bloc should talks between the two parties this week fail.

Speaking to Swedish newspaper Dagens Nyheter, the EU's trade commissioner, Cecilia Malmstrom, warned that while the EU wants to reach a settlement with the US, it will not shy away from hitting back at the punitive tariffs placed on certain exports by the Trump administration.

The retaliation would impact around $20 billion of goods, Malmstrom said, adding that the tariffs would not be levied against consumer goods.

"We hope that it doesn't come to that and that we can a solution. If not, the EU Commission is preparing a rather long list of many of American goods. It would be around $20 billion," she told Dagens Nyheter.

"No, now it's more general goods such as agricultural products, machinery, high-tech products and other things," she said, when asked if the EU would target specific US states.

Malmstrom's comments come as European Commission president, Jean Claude Juncker, travels to Washington for talks with the Trump administration aimed at diffusing the tensions between the two parties over Trump's trade war. Juncker's main aim, it is believed, is to persuade Trump not to levy punitive tariffs on European automobiles.

The US Commerce Department is investigating auto imports, and Trump has previously threatened large tariffs on imported cars. Last week, for instance, Trump said he was ready to impose a "tremendous retribution" against the EU.

Juncker and Trump's summit comes as Trump pushes his trade war more aggressively than ever before. After threatening last Friday to place tariffs on all $505 billion of goods imported to the US from China, he tweeted on Tuesday to say that tariffs are "the greatest!"

"Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It's as simple as that - and everybody's talking! Remember, we are the "piggy bank" that's being robbed. All will be Great!" - he tweeted.

Several hours later, however, he appeared to strike a slightly more conciliatory tone when tweeting about Juncker's upcoming visit.

"The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won't!"

Malmstrom, however, said she does not believe Trump and Treasury Secretary Steven Mnuchin's offer to completely remove trade barriers are serious, according to Reuters. Such an offer, she said, would be hindered by the USA's strict laws protecting American industries.

She then pointed to what happened during negotiations of the Transatlantic Trade and Investment Partnership (TTIP) in recent years.

"We tried earlier in TTIP negotiations to make the United States loosen those laws. It was completely impossible. They did not move a millimetre," she said.

"Basically, I'm an optimistic person, but heading into this I'm moderately optimistic. But one must always try," Malmstrom, who is a member of the EU delegation heading to Washington, concluded.