EUROPE signaled readiness to respond after U.S. President Donald Trump threatened to raise tariffs to 25 percent on cars and trucks imported from the European Union (EU), accusing the bloc of failing to comply with a trade deal.

Trump said on May 1 that the EU had not honored the bilateral trade agreement reached last year, and warned of higher duties on vehicles shipped to the United States.

In response, Eurogroup President Kyriakos Pierrakakis on Monday said that Europe is prepared to act if the U.S moves ahead. He stressed that dialogue remains the first choice and that Europe values the transatlantic relationship, but added that "all options" would be considered if commitments are beached.

On the same day, German Vice Chancellor and Finance Minister Lars Klingbeil urged Trump to honor the tariff agreement reached with the EU last summer. He warned that if Trump raises tariffs on EU cars, the bloc will take countermeasures.