On Friday, European Commission President Jean-Claude Juncker warned that there would be consequences for the US if Trump's threat of a 25 per cent tariff on steel and 10 per cent on aluminium imports takes effect, reports the Guardian.

"If the Americans impose tariffs on steel and aluminium, then we must treat American products the same way.

"We must show that we can also take measures. This cannot be a unilateral transatlantic action by the Americans... I'm not saying we have to shoot back, but we must take action.

"We will put tariffs on Harley-Davidson, on bourbon and on blue jeans - Levi's," Juncker added.

His warning came as the International Monetary Fund said that Trump's plan would cause international damage and also harm America's own economy.

"The import restrictions announced by the US President are likely to cause damage not only outside the US, but also to the US economy itself, including to its manufacturing and construction sectors, which are major users of aluminium and steel," the IMF said.

Other world leaders also threatened retaliation. Canadian Prime Minister Justin Trudeau said the US tariffs would be "absolutely unacceptable" and China too expressed "grave concern" over the plans, the Guardian reported.

Canada has the largest share of steel imports to the US at 16 per cent, according to data from the Department of Commerce, followed by Brazil and South Korea, with steel imports from China down 5 per cent in the most recent period.

Japan's steel industry also urged Trump not to impose steep tariffs on imports, warning it would have "serious harmful effects" on trade worldwide.

Meanwhile, the US President on Friday night asserted that "trade wars are good". 

In tweet Trump wrote: "When a country (the US) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big. It's easy!"

Trump's announcement sent stock markets around the world tumbling and could prompt other countries to take action.