European Commission Frames Tariff Hit List: Source

The European Commission is drafting a list of products upon which it could impose heavy taxes to send "a political message" to Donald Trump if the US president follows through on plans to impose tariffs on steel and aluminium, a European source said on Friday.

"There will be steel and aluminium products, but also industrial, agricultural and food products as well," said the source, who added Europe is "ready to act once there is specific confirmation" from Washington.

Trump triggered a furore on Thursday by announcing he would set tariffs of 25 percent on steel and 10 percent on aluminium to protect US producers as soon as next week.

He did not specify if the tariffs would target specific countries.

The announcement has sparked an outcry among US allies such as Canada, the European Union, Mexico and Australia as well as China, the world's biggest steel producer.

There has been speculation that the EU could target for retaliation products made in states that heavily supported Trump in the presidential election, like Kentucky bourbon and Florida oranges.

The source, who works at the commission, said these products could end up being among those targeted, but that the list has not yet been finalised.

"You have to find a good balance between the political message sent to Trump and the products which we have a need for," said the source, who added the countermeasures would be taken in conformity with World Trade Organization (WTO) rules.

In 2002, the EU threatened to tax a range of US products as part of a "steel war" unleashed by the administration of George Bush.

The list included not just steel products but also orange juice, apples, sunglasses, photocopiers and other goods.

The United States backed down before the EU carried out its threat to impose the retaliatory measures. (AFP)