After three years spent trying to deter Russia from destroying Ukraine, European Union leaders grappled on Monday with how to respond to a major ally who appears determined to start a trade war or even seize part of their territory.

"There are no winners in trade wars. If … the U.S. starts a trade war, then the one laughing on the side is China," said the EU's foreign policy chief.

Donald Trump is considering plans to impose a 10 per cent tariff on the EU, The Telegraph understands. The move would pour fuel on a blooming global trade war, which began at the weekend when the US president slapped sweeping levies on goods imported from Mexico, Canada and China.