The EU delivered its warning as it emerged that the largest business lobby group in the USA had written to the president to say a global trade war risked damaging his tax cut-led efforts to kickstart the economy.
At Trump s insistence, Canada, Mexico and the USA are renegotiating the North American Free Trade Agreement.
The Chamber, which has 3 million members, has historically worked closely with Republican presidents, and praised Trump for signing business tax cuts in December.
As the country where the world's most Fortune 500 companies are based, the United States is expected to bear the brunt of escalating trade tension in its corporate sector.
"Tariffs are beginning to take a toll on American businesses, workers, farmers and consumers as overseas markets close to American-made products and prices increase here at home", chamber President and CEO Thomas J. Donohue said in a news release.
Canada's retaliatory tariffs took effect Sunday against American products including Florida orange juice, ketchup and Kentucky bourbon.
In May, Mr. Trump ordered an inquiry into the possibility of imposing tariffs on auto imports.
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Xi's government has expressed confidence China can hold out against US pressure, but companies and investors are uneasy. One U.S. manufacturer said Chinese authorities on average used to inspect 2 percent of the vehicles it sent overseas .
Those measures would apply "across sectors of the U.S. economy", the letter reportedly said.
SC is among the hardest hit states, according to the analysis, though Washington stands to lose the most, with $6.2 billion of state exports threatened; $3.7 billion of that is soybean exports to China.
The EU retaliation came after Trump s administration on June 1 struck Europe as well as allies in Canada, Mexico and elsewhere with tariffs on aluminum and steel.
The U.S. light vehicle market was about 17.5 million units in 2016, with about 12 million vehicles made in the United States. With US exports to China standing at 130 billion USD, and Chinese imports to the US at 505 billion USD, the shortfall of 375 billion USD would not have pleased US President Donald Trump over his morning coffee.
The European Union has warned the United States that placing tariffs on automobiles would end up hurting the USA economy and would probably result in retaliatory measures from its trading partners. He dismissed suggestions that his attacks on the European Union were counterproductive. "But we believe that a potential 25 per cent tariff on imported vehicles and auto parts will, in fact, have the opposite affect".
According to the Financial Times, European leaders are getting more convinced that President Donald Trump will put new tariffs on European cars.
Mr. Trump's administration wants Germany - which would be hardest hit by automotive tariffs - to pressure the European Union to come to an agreement.
Several European auto makers already build their vehicles in the USA, with the most recent example being the BMW X7, which will be exempt from tariff changes.