The US investigation into European Union auto exports "lacks legitimacy, factual basis and violates global trade rules", the Commission said in a statement.
"The warning is the first time that the European Commission, in a written submission to the U.S. Department of Commerce seen by the Financial Times, has set out a detailed response to Mr. Trump's threat to slam punitive tariffs on imported vehicles".
The U.S. Chamber of Commerce, the nation's largest business lobbying group and customarily a close ally of Trump's Republican Party, is launching a campaign on Monday to oppose Trump's trade tariff policies, the organization told Reuters. The EU, which described the move as "pure protectionism", introduced duties on USA products in return, as did Mexico, Canada, Turkey and India.
The EU said in its submission that EU companies make around 2.9 million cars in the USA, which supports 120,000 jobs, or 420,000 jobs if auto dealerships and vehicle part retailers are included. "Tariffs that beget tariffs that beget more tariffs only lead to a trade war that will cost American jobs and economic growth".
"Based on the Tariffs and Trade Barriers long placed on the US and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US", Trump tweeted back in June.
While British factories kept up a steady pace of growth, fears of a full-blown global trade war and worries about stalled negotiations with Brussels on leaving the European Union knocked a gauge of confidence about the outlook down to a seven-month low.
USA tariffs on $34 billion worth of Chinese goods are due to go into effect on Friday, and Beijing is expected to retaliate in equal measure the same day. If the US starts taxing Chinese imports Friday, Beijing plans to impose 25 percent tariffs on 545 USA products worth $34 billion a year - from soybeans and lobsters to sport-utility vehicles and whiskey.
Fugitive web tycoon Kim Dotcom loses appeal against extradition to US
Earlier, his appeal was rejected consecutively by New Zealand's North Shore District Court and the High Court. Mr Dotcom estimates he has spent 165 days in court and spent $40 million in legal fees on the case.
The White House did not respond to a request for comment responding to the Chamber.
The US will start imposing a 25 per cent tariff on US$34b in Chinese imports this Friday.
General Motors has also warned that higher U.S. import tariffs could cost jobs and raise vehicle prices.
The White House has already imposed tariffs on European Union steel and aluminium and faced reprisals in the form of extra charges on a range of goods, including US-made motorcycles, jeans and even playing cards.
Some U.S. companies have already been pressured to take action. "They treat us very unfairly", Trump said qualifying his remarks.
Pennsylvania: In total, $1.7 billion of state exports are threatened by retaliatory tariffs. The activist investor's fund Third Point took a $3.5 billion stake in Nestle a year ago, saying it would push for a new strategy to help the company improve its sales and profitability.
It reported that manufacturers were "overwhelmingly" concerned about the impact of the tariffs imposed by the Trump administration on products including steel and aluminium.