An escalatory spiral that leads towards Eurasia's 10% 'trade war' scenario, however, would prompt Brussels to deploy escalatory measures, such as "export controls/duties, public procurement curbs, and/or penalties on U.S. services exports" by using the ACI "trade bazooka as a last resort," they concluded.

European Union and US negotiators are heading into another week of intensive talks, as they seek to clinch a trade deal by Aug. 1, when US President Donald Trump has threatened to hit most EU exports with 30% tariffs.