The European Union is prepared to unleash a €21bn (£18.2bn) retaliation against Donald Trump after the US president announced new tariffs, Italy has said. The euro has fallen and European stocks are on track to open lower after Mr Trump on Saturday said he would impose a 30pc tariff on imports from Mexico and the EU from August 1.

President Donald Trump's latest threats to impose a 30% tariff on all imports from Mexico and the European Union are drawing criticism from prominent economist Peter Schiff.

The tariffs are likely to inflame tensions with one of the largest U.S. trading partners.