The European Union has warned that its trade with the United States could be effectively wiped out if Washington makes good on its threat to slap a 30% tariff on goods imported from the bloc.

The International Monetary Fund has estimated the EU's own internal barriers to the free flow of activity are the equivalent of tariffs of 44% for goods and 110% for services. Mooted reforms such as creating freer cross-border capital markets have made little headway in more than a decade.

Ignacio Sánchez Recarte, secretary general of wine lobby CEEV, said "there is no political, strategic or economic interest" for involving the alcoholic beverage in the transatlantic trade spat.

The FTSE 100 rose above the 9,000 mark for the first time on Tuesday morning after Brexit Britain was branded a 'clear winner' in Donald Trump's trade war.

Trump has also threatened reciprocal tariffs on any counter measures from the EU - the consequences could not be greater