Malmstrom was speaking after talks with US trade officials in Washington.

She said the retaliation measures could target cars, agriculture or other goods, but such a move would first require talks with EU member states.

She still expressed hope the US would not levy new tariffs, but noted that the final decision rested with US President Donald Trump.

The US president has insisted he is seeking to correct imbalances that have created unfair trade conditions for the US and has shown he will play hardball to get what he wants, including placing tariffs on allies.

Malmsrom earlier told German newspaper Die Zeit that if Trump follows through on this long-standing threat, "we will hit back."

Malmstrom's team and the office of US Trade Representative Robert Lighthizer have been working on a framework for a future agreement ever since Trump and European Commission President Jean-Claude Juncker met in July to defuse trade tensions.

The US-EU trade dispute erupted in June with the hiking of US tariffs on steel and aluminium imports, prompting the EU to raise tariffs on US products.

A statement issued after the July meeting referenced the potential abolition of tariffs, non-tariff barriers and subsidies for industrial goods.

However, the EU remains concerned about the potential threat of new tariffs on its auto exports. The US is assessing the option as a potential national security measure.

Malmstrom called this premise "totally implausible."

"We're talking about cars," she added.

"This is not how you treat friends."

The US Ambassador to the EU, Gordon Sondland, blamed the bloc for delaying progress and cited its unwillingness to include agricultural products in an eventual deal.

US farmers have long sought increased access to European markets, but the EU remains strongly opposed. Malmstrom reiterated the EU position Wednesday, declaring that concession "is not going to happen."

Australian Associated Press