President Trump on Sunday declared his trip to the G20 leaders summit a "great success for the USA", saying on Twitter he had "explained" to his counterparts that the U.S.is intent on improving its trade deals.
One senior European official said that there were wide areas of disagreement as leaders headed into their first joint meetings on Friday.
The EU is the second largest producer of steel in the world after China.
The European Union is considering retaliatory tariffs against the USA if President Donald Trump follows through on his plan to impose restrictions on the imports of steel, according to a new report from Shawn Donnan at the Financial Times.
William Reinsch, a fellow at the Stimson Centre said if the threat of tariffs are used to pressure members of the G20's forum on steel overcapacity - set up past year - to tackle the problem, a good outcome could yet prevail. His point was that it doesn't make sense to talk about bilateral trade deficits in a multilateral world, the official said.
Angela Merkel the Chancellor of Germany has been critical of the view Trump holds for global trade.
The U.S., under Section 232 of its Trade Expansion Act, can impose tariffs and other trade restrictions if imports are seen as weakening industries crucial to national security.
- According to a new report, President Trump's aggressive stance on global trade may be working in America's favor.
"That hurts us, but it also hurts the Americans", he added.
At the 2016 G-20 summit in Hangzhou, China, world leaders agreed to coordinate their efforts to reduce excess capacity in global steel markets through the Organization for Economic Cooperation and Development's global forum for steel.
"There is a danger that the summit will lead to polarisation between the United States and other countries" on climate change and other issues, warned Oxford Analytics economist Adam Slater.
Prime Minister Justin Trudeau's government has been privately assured by the USA that Canada won't be affected by any steel measures, according to a Canadian government official, who spoke on condition of anonymity.
"If the Trump administration finds that steel imports are disrupting national security and import tariffs are needed, those could hit many members of the G-20", said Matthew Goodman, a senior adviser at the Washington-based Center for Strategic and International Studies. The U.S. now has 28 anti-subsidy tariffs on Chinese steel, including several imposed under President Obama. For example, U.S. Steel went up 8% in June.
Several of those exporters-Canada, Turkey, and Germany-are members of the North Atlantic Treaty Organization (NATO) and as such the Trump administration may have to show that their strategic partners in the military alliance are somehow threatening US national security interests.
When it comes to free trade in particular, it appears to be Trump against the world.