President Trump speaks during a news conference with Swedish Prime Minister Stefan Lofven in the East Room of the White House Tuesday.
Evan Vucci, AP

WASHINGTON — President Trump threatened to slap tariffs on European cars on Tuesday, the latest escalation of trade disputes amid a growing concerns that his steel and aluminum tariffs could evolve into a full-blown trade war.

"The EU has been particularly tough on the United States. They make it almost impossible to do business with them, and yet they send their cars and everything else back into the United States," Trump said while standing next to the prime minister of Sweden, a country known for its Saabs and Volvos.

"We can put a tax of 25% on their cars and believe me they won't be doing It for very long," he said. 

But then he also predicted a peaceful resolution to any trade dispute: "We're going to straighten it out, and we’ll do it in a very loving way."

The European Union has threatened to retaliate against Trump's planned tariffs on steel and aluminum with its own import taxes on American-made motorcycles, bourbon and blue jeans.

Speaking at a joint press conference with Swedish Prime Minister Stefan Löfven, Trump repeated his belief that the United States would win in a trade war. "When we’re behind every single country, trade wars aren't so bad," he said. "The trade war hurts them. It wont hurt us."

For his part, Löfven diplomatically expressed a desire for cooperation on trade but said he understood Trump's desire to look out for American interests.

"For me, it is crucially important that we have this free trade," he said. 

The president's threats of tariffs have divided his own party into nationalist and globalist camps. Republicans on Capitol Hill are lobbying Trump to soften the tariffs, with House Speaker Paul Ryan arguing Tuesday for "more surgical and more targeted" trade actions.

Trump is citing his power to impose limits on commodities necessary for national security. But White House trade adviser Peter Navarro said Sunday that there would be no exceptions for allied countries because the steel market is global.

Trump picked up on that argument Tuesday, saying that the 2% of steel imported into the United States from China was misleading.

"It doesn’t look good when it all comes out of China, so they ship it though other countries," Trump said.