The European Commission has said threatened punitive U.S. taxes worth $3.1 billion on European imports would be "very damaging."

The U.S. Trade Representative has said it is considering levying taxes on European products – ranging from olives to decaffeinated coffee – as part of the ongoing dispute over Europe's Airbus and U.S. aircraft makers Boeing.

A commission spokesman said the tariffs would be "very damaging," saying: "It creates uncertainty for companies and inflicts unnecessary economic damage on both sides of the Atlantic.

"This is particularly the case as companies are now trying to overcome the economic difficulties in the aftermath of the COVID-19 crisis.

"By potentially targeting new products, the U.S. is increasing this damaging impact due to the cost of new disruptions to supply chains for the product potentially subject to new duties.

"We are concerned that this might even go beyond what is authorized under the WTO."

Read more: EU loses appeal over WTO Airbus ruling

Read more: US rejects EU case for retaliatory tariffs over Boeing tax breaks

The U.S. and the EU have been in dispute for years over subsidies to Airbus, and in 2019 the WTO – the World Trade Organization – authorized the U.S. to impose up to $7.5 billion of taxes on European goods.

The EU has threatened its own tariffs on Boeing, but in April EU Trade Commissioner Phil Hogan said he saw the coronavirus pandemic as an opportunity to defuse the tensions.

The U.S. has already imposed tariffs on steel and aluminium imports from the EU, which was followed by the EU taxing iconic U.S. products including motorbikes and denim jeans.

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