President Donald Trump on Thursday threatened to impose a massive tariff on European alcohol in response to the European Union’s retaliation against his steel and aluminum tariffs – a tit-for-tat escalation of a trade war that could easily get out of hand.

A full-scale global trade war would hurt the United States in particular and could re-energise Europe's push towards unity, European Central Bank President Christine Lagarde said on Friday.

Worsening relations with three of the United States’ biggest trading partners dominated a Senate hearing for the would-be U.S. ambassadors to Canada, Mexico and Japan.